BERLIN (Reuters) - German Chancellor Angela Merkel said a European Union summit on Saturday will discuss the possibility of further sanctions on Russia in the light of reports of increased numbers of Russian troops in Ukraine and advances by pro-Russian separatists.

"We are getting reports of an increased presence of Russian soldiers and of new unrest and fresh advances of the separatists in areas that until now were very quiet," she told a news conference on Thursday after talks with Balkan leaders.

"We made it clear in March this year that if there were a further escalation, more sanctions would have to be discussed. So the issue will be on the agenda at the summit and we will have to ask ourselves how we will react," she said.


(Reporting by Stephen Brown, Annika Breidthardt and Erik Kirschbaum)