Ukraine's ambassador has insisted that Kiev is ready to respond to Russia with full force, as pro-Kremlin separatists show little sign of laying down their arms.

Speaking to CNBC on Tuesday, Olexander Scherba, ambassador-at-large of Ukraine, said that soldiers had been deployed to the east of the country, despite Russia claiming the contrary.

"There are special forces deployed on the ground in Ukraine's east but I'm not authorized to comment (any more) on that," Scherba said. 

"We are ready to respond with all forces that we have and we will do that." 

A deadline for the separatists to give up their occupation of government buildings across east Ukraine was ignored on Monday.

But despite threats from Kiev, witnesses said there were no signs that Ukrainian soldiers were preparing to take on the rebels, Reuters reported on Tuesday.

Russian President Vladimir Putin's spokesman, meanwhile, said claims of a military presence in eastern Ukraine were "absurd," according to Reuters. 

Scherba, however, insisted that Ukraine was "ready to respond" to whatever happened next, and insisted a resolution to the crisis lay with Russia. 

"Let's hope that it doesn't come to full-blown aggression and war," he said. "It's Russia's choice, only Russia's choice right now." 

Stocks suffer

The escalation of tensions in the region has once again hit markets across the world, although Russia stocks have been particularly badly affected.

Russia's MICEX stock index was down 1.5 percent on Tuesday morning, and year-to-date has fallen close to 12 percent. The dollar also rose against the rouble on Tuesday.

In Ukraine, Read Morethe central bank hiked its benchmark rate from 6.5 percent to 9.5 percent on Monday in an effort to bolster its struggling currency, the hryvnia.

Since the start of the year, the dollar has risen over 40 percent against the hryvnia, but the central bank's action saw the dollar fall over 5.5 percent against the currency on Tuesday morning.

'Very obvious' Russia involved

Ukraine has blamed Russia for instigating the separatists' recent action – something that Moscow denies. Scherba, however, said it was "very obvious" that Russia was involved. 

"We have received reports all over the place that there is Russian activity and there are Russian special ops units active on the ground in Ukraine's east," he said. 

"It's very obvious that the Russian factor is already present on the ground."

On a phone call Monday, U.S. President Barack Obama urged his Russian counterpart to use his influence with the pro-Kremlin separatists to encourage them to depart the occupied buildings. 

Obama also urged Putin to withdraw troops from the Ukrainian border. Russia has amassed between 35,000 and 40,000 troops near the Ukraine border, Britain's U.N. ambassador said on Sunday, according to Reuters. 

Putin, meanwhile, called on Obama to prevent the use of force if the situation continues. 

The Ukrainian crisis reached fever pitch last month when Russia annexed Crimea after the Ukrainian region's residents voted overwhelmingly in favor of breaking away. 

Western officials responded to the annexation by imposing sanctions on Russia, including the travel bans and asset freezes on a number of officials. Russia retaliated by imposing sanctions of its own. 

On Monday, officials from both the U.S. and Europe warned that Moscow faces further sanctions if it does not de-escalate the crisis.

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