WASHINGTON - The United States on Wednesday escalated sanctions against Russia over the Ukraine crisis, targeting firms in the financial, energy, and arms sectors of Russia.

The United States also slapped sanctions on individuals it accused of undermining Ukraine's sovereignty or misappropriating Ukrainian property, said a statement issued by the Treasury Department.

"These sanctions are significant, but they are also targeting, designed to have the maximum impact on Russia while limiting any spillover effects on American companies or those of our allies," Obama said in an address at the White House Wednesday.

The sanctions prohibit American citizens from providing new financing to Gazprombank OAO and VEB, two major Russian financial institutions, and energy firms OAO Novatek and Rosneft, limiting their access to US capital markets, according to the Treasury statement.

The United States also targeted eight Russian arms firms, which are responsible for the production of a range of materials that include small arms, mortar shells, and tanks, and Feodosiya Enterprises, a key shipping facility in the Crimean peninsula.

Among the individuals sanctioned are four Russian government officials, including Sergey Beseda, a senior Russian Federal Security Service official.

"We are expecting is that the Russian leadership will see once again that its actions in Ukraine have consequences, including a weakening Russian economy and increasing diplomatic isolation," Obama said.

By imposing sanctions on entities within the financial services and energy sectors, the US has increased the cost of economic isolation for key Russian firms that value their access to medium- and long-term US. sources of financing, said the statement.

The new sanctions are the most punishing measures to date for Russia's intervention in Ukraine, the New York Times quoted US officials as saying.

"We have said for quite some time that Russia's failure to take some of the steps that would de-escalate the conflict in Ukraine put them at risk of facing greater isolation and greater economic consequences," White House spokesman Josh Earnest told a regular briefing before the new sanctions were announced.

In Wednesday's address, Obama also touched upon issues such as Iran's nuclear program and the bloody conflict between Israel and Hamas.

"It's clear to me that we've made real progress in several areas, and that we have a credible way forward," Obama said of the ongoing talks between world powers and Iran on Tehran's nuclear program.

However, as a deadline of July 20 looms, there are still significant gaps between international community and Iran, Obama said, adding that additional time may be necessary to extend the negotiations.

On the conflict in the Middle East, Obama reiterated the US stance that Israel has the right to defend itself from rocket attacks from Gaza militants and stressed the need to avoid further escalation.

"Over the next 24 hours ... we will use all of our diplomatic resources and relationship to support efforts of closing a deal on a cease-fire," Obama said.