Russian President Vladimir Putin warned German Chancellor Angela Merkel that Ukraine was now on the verge of civil war after the Kiev government sent in the army against separatists in the east of the country, the Kremlin said Wednesday.

"The Russian president remarked that the sharp escalation of the conflict has placed the country, in effect, on the verge of civil war," the Kremlin said in a statement on telephone talks between the two leaders.

But the leaders both "emphasised the importance" of the planned four-way talks on Ukraine on Thursday between top diplomats of Russia, the European Union, the United States and Ukraine.

"The hope was expressed that the meeting in Geneva can give a clear signal to return the situation to a peaceful framework," the statement said.

The Kremlin statement described the actions of the Ukrainian army in eastern Ukraine as an "anti-constitutional course to use force against peaceful protest actions."

Putin told Merkel about the importance of stabilising the Ukrainian economy and ensuring that supplies of Russian gas to Europe are not interrupted.

In a separate telephone call with Israeli Prime Minister Benjamin Netanyahu, Putin placed the blame for the escalation squarely on the Kiev government.

Putin "pointed out that the sharp escalation was a consequence of the irresponsible policies of Kiev which ignored the legal rights and interests of the Russian-speaking inhabitants of the country."

He said that the use of force against "civilian protest movements" in the east of Ukraine was "unacceptable".