ROUGH CUT (NO REPORTER NARRATION)

President Barack Obama said on Tuesday the United States has expanded sanctions against Russia over its support for rebels in eastern Ukraine.

Obama said the sanctions targeted energy, defense and finance sectors of the Russian economy.

"Russia is once again isolating itself against the international community setting back decades of genuine progress and it doesn't have to come to this, it didn't have to come to this, it does not have to be this way," Obama said.

Meanwhile, the European Union reached agreement on Tuesday on the bloc's first broad economic sanctions on Russia over its role in Ukraine, diplomats said, marking a new phase in the biggest confrontation between Moscow and the West since the Cold War.

The measures will shut major state-owned Russian banks out of European capital markets and target the defense sector and sensitive technologies, including oil, but exclude the vital gas sector, on which Europe is he