The talks foundered over opposition to Italian Foreign Minister Federica Mogherini's candidacy for the foreign policy role and demands by central and east European leaders that the job should go to someone from their region, diplomats said.
German Chancellor Angela Merkel said Moscow had failed to fulfil commitments to restore peace in the region.
"Of course it is a deepening of the economic sanctions, indirectly the listing of individuals were already economic sanctions, but it is a deepening of that. Now we can have a discussion on stage two or three, but that is not relevant in my eyes. But we are entering the economic sphere here," she said.
The EU will expand sanctions against Russia to target companies that undermine Ukrainian sovereignty and will ask the EU's European Investment Bank and the European Bank for Reconstruction and Development to suspend new lending.
Merkel also called upon Israel and Palestinians to make use of the opportunity to achieve a ceasefire.
"We once again stressed that of course Israel has the right to defend itself within the limits of proportionality and we welcome the initiative taken by Egypt to bring about an immediate ceasefire. Israel was ready to accept such a ceasefire, Hamas wasn't and now the development seems to be going in the direction of a limited ceasefire, but of course that opportunity of a limited ceasefire has to be used," she said.