The Kremlin condemned economic sanctions as "destructive" after European leaders agreed to extend sanctions on Russia until the end of the year.

European Union leaders agreed to tie the sanctions to the implementation of the Minsk ceasefire agreement reached in February.

The EU imposed sanctions on Russia over its alleged role in the Ukraine conflict and the annexation of Crimea.

The economic sanctions are now linked to the "complete implementation" of the ceasefire deal between Russia, pro-Russian rebels and Ukraine.

The February deal outlines a plan for Ukraine to regain control of its eastern border from the rebels by the end of 2015.

"Our common intention is very clear – to maintain the sanctions until Minsk is fully implemented," European Council President Donald Tusk told reporters in Brussels.

Russian President Vladimir Putin said this week that sanctions had been damaging for Russia's economy but were not fatal.

Kremlin spokesman Dmitry Peskov said Russia would continue to pursue its national interests.

"We prefer to engage in creative matters, not destructive matters such as sanctions rhetoric. So we do not discuss sanctions and the Russian Federation will do what is in its national interests," Peskov said after the EU's latest move.

While European leaders look set to pursue sanctions as a way of reigning in Russian ambitions in eastern Ukraine, the measures could turn out to be counter-productive if overused, according to international sanctions lawyer Sarosh Zaiwalla, who is currently representing a sanctions-hit Russian oil major.

"As previously witnessed, sanctions often cause an introspective response from sanctioned countries, hit the wrong people and cost the west millions in trade and damages from innocent businesses, all of which have the effect of not achieving their intended goal," Zaiwalla said in a statement.

"One only has to look at the examples of Cuba, South Africa and now Iran to see that sanctions are only one means to an end, of which there are many, and are in fact counterproductive if too readily pursued," he said.