European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy hosted US President Barack Obama at a UN-EU summit in Brussels on Wednesday, with a large portion of the talks between the three leaders focusing on Russia's annexation of Crimea.

Just a few hours after Russia's top general declared that the Russian flag was waving above every Crimean military base, Barroso, Van Rompuy and Obama all addressed increased sanctions that could be imposed on Russia if the situation continues to escalate.

Obama has said possible sanctions could be aimed at Russia's energy sector. He added US-EU coordination on the issue has so far been good, and that if Moscow continues on its current course, "the isolation will deepen."

Van Rompuy said that there was still time for Russia to work with Ukraine to find a diplomatic solution to the situation that saw Crimea pass from Ukrainian to Russian control after a referendum held by the citizens of Crimea, a move he described as "a disgrace in the 21st century."

"We will not recognize it," Van Rompuy said.

Obama said that if Russian leaders intended to increase the divisions between Europe and the US with their action in Crimea, "they clearly miscalculated."

No US energy reliance

The conversation between the three men also focused on a free trade agreement that is being discussed between the US and the European Union, and its impact on energy policy.

Obama warned that Europe cannot rely on the US for its energy provisions.

"Europe collectively is going to need to examine ... their energy policies, to find additional ways that they can diversify and accelerate energy independence," he said. "But we're also making some choices and taking on some of the difficulties and challenges of energy development, and Europe is going to have to go through some of those same conversations."

Several EU nations rely heavily on Russia for gas supplies, sparking concern Moscow could limit its energy access in response to European and US sanctions.

"The situation in Ukraine proves the need to reinforce energy security in Europe," Obama said. "We are considering new collaborate efforts to achieve this goal."

Obama said the proposed EU-US free trade deal would make it "much easier" for Washington to grant natural gas licenses, as large amounts of the energy source is already licensed for export, just not specifically to Europe.

'Freedom isn't free'

Later on Wednesday, Obama met with NATO officials, where the Crimea standoff was also a central topic.

As some nations cut back on spending, Obama said the US wants to see every NATO member "chip in" for their mutual defense.

"I've had some concerns about diminished levels of defense spending by some of our partners in NATO," he said. "The situation in Ukraine reminds us that freedom isn't free."

He added that military alliance should set up a regular presence in Eastern Europe. Obama said NATO foreign ministers meeting next week should study plans to "make sure ... that we do more to ensure that a regular NATO presence among some of these states that may feel vulnerable is executed."

mz,dr/jlw (AP, Reuters, AFP, dpa)