US ready to hold Russia security talks in January

The Nato talks would include all 30 alliance members and the Organisation for Security and Cooperation in Europe (OSCE) ones would include all 27 EU countries, she noted.

"Let me be clear: There will be no talks on European security without Europe," she said, after Moscow suggested it preferred to talk to Washington only.

"On the bilateral engagement, we will decide on a date together with Russia, and we believe that that will take place in January," she said.

Donfried spoke after Russia recently surged troops toward Ukraine's borders and amped up its aggressive propaganda.

It also called for security talks aimed at forcing Nato to pull out troops and weapons from eastern Europe and revoke promises that Ukraine can one day join the Western alliance.

"We are prepared to discuss those proposals that Russia put on the table. There are some things that we're prepared to work on ... There are other things in those documents that the Russians know will be unacceptable," Donfried said.

"We will not compromise the key principles on which European security is built, including that all countries have the right to decide their own foreign and security policy course free from outside interference," she added.

Donfried spoke to press the same day Russian president Vladimir Putin said in Moscow he had "nowhere to retreat" on Ukraine.

His defence minister, Sergei Shoygu, also claimed US mercenaries were planning to carry out a false-flag chemical weapons attack in east Ukraine.

The increasingly shrill rhetoric made some diplomats think Russia's offer of security talks was a red herring designed to mask its true intentions.

"I don't think they're bluffing anymore. I really think there's going to be a new attack on Ukraine," one EU diplomat said after listening to Putin and Shoygu.

"This [Tuesday's] speech is something different - Putin's list of completely fabricated threats here is truly striking ... and scary. If he's trying to scare us by acting crazy, he's succeeding with me," Michael McFaul, a former US ambassador to Russia, also said.

But Donfried said Western allies were clear-eyed about the threat.

"There is clarity about what we [the US and EU] will do in the face of Russian aggression, and that we are prepared to move immediately," she said.

"Further military aggression against Ukraine will have massive consequences ... we are poised to move in a dramatic way," she added.

Asked if this could include cutting off Russia from the SWIFT international banking system and shutting down its Nord Stream 2 gas pipeline to Germany, she said: "There's no sanctions option that's off the table here, and we are talking about things that would have severe consequences for Russia's economy and financial system".

Neither US nor Nato troops would get involved in fighting as Ukraine is not a member of the alliance, they previously said.

But the US has provided Ukraine with $2.5bn (€2.2bn) in "military assistance" since 2014, Donfried noted.

And "as [US] president [Joe] Biden has told president Putin, should Russia further invade Ukraine, we will provide additional defensive materials to the Ukrainians above and beyond that," she said.