German Chancellor Angela Merkel warned Moscow on Wednesday about the option to implement strict economic sanctions against Russia if the country refuses to back a peace plan announced by Ukrainian President Petro Poroshenko.

Merkel criticized Moscow ahead of talks on Ukraine for failing to engage in peace talks as Ukrainian government forces continued on with an offensive against pro-Russian rebels.

Ukrainian, Russian, German and French foreign ministers held a meeting in Berlin Wednesday afternoon to discuss restoring a 10-day ceasefire in eastern Ukraine, which the Merkel said had prompted "no significant reaction" from the separatists.

"We will not stop looking for diplomatic solutions," said the chancellor, according to The Daily Star. "But we are nowhere near where we want to be."

"Regarding sanctions against Russia, we have so far reached level two and we cannot rule out having to go further," Merkel said at a news conference with NATO Secretary General Anders Fogh Rasmussen, reports Reuters.

"It is regrettable that during the 10-day unilateral ceasefire announced by the president of Ukraine, that there was no significant reaction to the peace plan, and that the ceasefire was not accepted by the separatists," she added.

"We will not stop looking for diplomatic solutions. The German foreign minister will host the Russian and Ukrainian foreign ministers today. But we are nowhere near where we want to be."

Both the European Union and United States have threatened to enforce tougher sanctions against the Russian economy unless it reins in the separatists in eastern Ukraine. However, Moscow denies supporting them.

Separatists fired a launched missile that struck and damaged an SU-24 attack plane, according to a military spokesman. Plus, five servicemen, including a Ukrainian border guard, had been killed since the renewal of the offensive on Monday.

As a result, 200 Ukrainian service personnel have been killed since the start of the conflict, including 150 soldiers, said Andriy Lytsenko, a spokesman for the national security and defense council. Hundreds of civilians and rebels have also died in the conflict.