BERLIN, July 2 (Reuters) - German Chancellor Angela Merkel criticised Moscow on Wednesday for failing to engage on a peace plan announced by Ukrainian President Petro Poroshenko and said tougher economic sanctions against Russia were still an option.
"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.
"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." (Reporting by Noah Barkin and Stephen Brown)