* NATO ambassadors hold emergency session to discuss Crimea
* Rasmussen warns Russia it threatens Europe's security
* Diplomats see limited scope for NATO response (Adds details on likely outcome of meeting)
By Luke Baker and Justyna Pawlak
BRUSSELS, March 2 (Reuters) - Russia's seizure of Crimea is a threat to peace in Europe and the situation must be "de-escalated", NATO's secretary-general said on Sunday, but diplomats said the alliance was unlikely to agree on major steps to rein Russia in.
Speaking before chairing an emergency meeting of ambassadors from the 28 NATO member states, known as the North Atlantic Council, Anders Fogh Rasmussen warned that Russia's actions were unacceptable and could destabilise the continent.
"What Russia is doing now in Ukraine violates the principles of the United Nations charter," Rasmussen told reporters.
"It threatens peace and security in Europe. Russia must stop its military activities and its threats."
Despite the strong words, diplomats said they did not expect NATO to agree any significant measures to pressure Russia, with the West struggling to come up with a forthright response that does not risk pushing the region closer to military conflict.
One official said a statement to be issued after the meeting would condemn Russia's actions in strong terms, but not threaten any specific response apart from the possibility of scaling back NATO-Russia cooperation if Moscow does not change course.
The stand-off has created the greatest moment of tension between Russia and the West since the collapse of the Soviet Union in 1991, an event Russian President Vladimir Putin once called the worst geopolitical catastrophe of the 20th century.
NOT RILING SENTIMENT
"I think we must be careful not to give the Russians anything that could rile up pro-Russian sentiment in Crimea," one senior NATO diplomat said ahead of the meeting.
Despite a 90-minute phone call between President Barack Obama and Putin on Saturday, and other calls to the Kremlin by European leaders, Russia shows no sign of backing away from its de facto occupation of Crimea and influence in east Ukraine.
U.S. Secretary of State John Kerry warned Russia it could face targeted sanctions including visa bans, asset freezes and trade isolation if it did not back down, and said major world powers were ready to isolate Moscow.
EU foreign ministers will hold an emergency meeting on the situation on Monday, but are not expected to agree any sanctions. Instead, several diplomats indicated there would be a push for high-level mediation.
Moscow has said it is merely protecting the lives of Russian-speaking nationals, and appears to be calculating that the West cannot afford to risk a wider conflagration by taking anything approaching military action.
While Ukraine is associated with NATO, it is not a member and therefore cannot invoke the alliance's most powerful diplomatic tool, known as Article 5, which states that an attack against one member is an attack against all.
Given those limitations, the strongest response that can be expected in the coming days is for the United States to move some warships into the Black Sea, military experts said.
"NATO can only say what 28 nations allow it to say," said Karl-Heinz Kamp, academic director of the Federal Academy of Security Policy in Berlin. "There are member states which are more pro-Russia than others."
Several NATO and European Union member states depend almost entirely on Russia for energy, giving them reason to maintain solid relations even if they deplore its actions.
"Wars aren't very popular at this moment," said Tim Ripley, a military expert with Jane's Defence Weekly magazine.
Yet Western credibility may be on the line.
"If the Russians take over Crimea, it would humiliate the West and show it to be a paper tiger, unwilling to protect a European country against outside aggression," said Ripley.
Short of a military response, NATO could cut cooperation with Russia, with which it has frequent contact at ministerial level and has conducted joint military exercises.
Political or economic sanctions are also possible, although the European Union has to decide such measures unanimously, which could prove difficult. Cyprus alone could conceivably veto pan-EU sanctions against Moscow.
"The most effective support NATO members could give Ukraine would be financial sanctions against Russia, refusing to buy its oil and gas," said Ripley.
"It's a chicken-or-egg question. Do they need money more than we need their oil and gas?"
Alternatively, the West could try diplomatic isolation of Russia, which is due in June to host a summit in Sochi of the Group of Eight leading economic powers. Already, four G8 members have halted preparations for the gathering and diplomats have talked about suspending Russia.
"If the G8 expels the Russians and turns itself into a G7, that would hurt Putin's self-esteem," said Nick Witney of the European Council on Foreign Relations. (Additional reporting by Robert-Jan Bartunek and Adrian Croft; writing by Luke Baker; Editing by Kevin Liffey)
Our Standards: The Thomson Reuters Trust Principles.