WASHINGTON (AFP) ― U.S. President Barack Obama said Wednesday Russian counterpart Vladimir Putin is unlikely to shift his stance on Ukraine until the full force of economic sanctions leveled against Moscow hits home.

Obama said Putin’s “nationalist, backward-looking” outlook had isolated Russia internationally but had played well domestically.

“We continue to offer them a pathway to a diplomatic resolution of the problem. But the challenge is this is working for him politically inside of Russia, even though it is isolating Russia completely internationally,” Obama told a forum for business leaders organized by the Wall Street Journal.

“If you asked me, am I optimistic that Putin suddenly changes his mindset, I don’t think that will happen until the politics inside of Russia catch up to what’s happening in the economy inside of Russia, which is part of the reason why we’re going to continue to maintain that pressure,” Obama added.

Sanctions are “having a big bite” on Russia’s economy, Obama added.

Hopes of a Dec. 5 cease-fire in the war-torn eastern Ukrainian region of Lugansk were raised on Tuesday. But it remains to be seen whether the agreements will hold.

Ukraine and pro-Russian separatists signed a Russian-brokered truce on Sept. 5 in the Belarussian capital Minsk that helped stem some fighting, but it has been frequently broken and followed by hundreds of deaths on both sides.

According to Obama, Putin had been taken by “surprise” over Ukraine.

“He has been improvising himself into a nationalist, backward-looking approach to Russian policy that is scaring the heck out of his neighbors and is badly damaging his economy,” Obama said, adding that he retained a “very direct, blunt” relationship with Putin.

The two leaders met briefly on the sidelines of the Asia-Pacific Economic Cooperation summit in Beijing last month but did not have a formal bilateral meeting.

Their previous brief encounter took place in France in June during ceremonies to mark the 70th anniversary of the D-Day landings.