William Hague intensified demands on Russia to halt the supply of arms to separatists in eastern Ukraine as he condemned the shooting down of a military transport aircraft carrying 49 people.
Prosecutors in Ukraine said 40 service personnel and nine crew were killed when the plane came under attack as it approached the airport in Lugansk - the biggest single loss in the fighting so far.
Newly elected Ukrainian president Petro Poroshenko, who recently opened talks with Moscow in a bid to restore peace to the region, promised retaliation for "cynical acts of terrorism".
The United States has said it has evidence that rebel forces have been supplied with tanks, heavy weapons and rocket launchers from Russia.
Mr Hague said: "I condemn the attack on a Ukrainian military transport plane over the city of Lugansk which has reportedly resulted in the loss of life of a large number of Ukrainian military personnel.
"I offer my sincere condolences to the families, friends and colleagues of those affected.
"This tragic incident underlines once again the urgency and importance of Russia taking further measures to prevent the escalation of violence in eastern Ukraine, including by stopping support and the supply of arms for separatist groups.
"The international community stands ready to impose further sanctions if Russia continues to provoke instability in Ukraine."
Mr Hague said the previous sight of tanks crossing the border was "completely unacceptable".
Pro-Russian rebel leaders have declined to say where they obtained the tanks, which were part of a column of armoured vehicles that crossed the border on Thursday.
The setback came not long after Ukrainian troops celebrated success in driving separatists from occupied buildings in the southern port of Mariupol, the second largest city in the Donetsk region which rebels have declared independent of Kiev.
"Russia needs to commit to defusing tension. This means securing borders, withdrawing all military forces, and preventing further violence in eastern Ukraine," Mr Hague said.
"I urge the Russian leadership to work with President Poroshenko to restore stability and to regain the trust of the international community."
Shadow foreign secretary Douglas Alexander said: "News that 49 Ukrainian service personnel have lost their lives in an attack on a military aircraft is deeply concerning.
"Petro Poroshenko, Ukraine's new president, made clear last week that the instability and fighting in eastern Ukraine must be brought to an end.
"Confirmation that Russian tanks entered into Ukraine's territory will fuel tensions in the area, and it is vital that Russia now fully commit to de-escalating the situation, instead of taking steps to inflame it.
"The international community should continue to make it clear to President Putin that it remains prepared to implement further sanctions if circumstances in Ukraine merit this response."