By Naftali Bendavid and Matthew Dalton 

BRUSSELS--European Union foreign ministers on Tuesday toughened sanctions on Russia following the crash of Malaysia Airlines Flight 17 in eastern Ukraine, but they avoided adopting an immediate broad arms embargo, suggesting a split over Moscow's actions in Ukraine remains pronounced.

The ministers gathered in Brussels decided to sanction people and organizations who have provided support to Russian decision makers, agreeing to name specific targets as early as Thursday. Targets are expected to include for the first time penalties against prominent Russians close to President Vladimir Putin.

And the ministers said they would go further if they don't see "full and immediate cooperation" from Russia and pro-Russia separatists on handling the crash aftermath, as well as limiting the arms flow into eastern Ukraine. That could include trade restrictions on defense, energy and high-technology items, as well as limiting Russia's access to credit markets, they said.

"Those directly and indirectly responsible for bringing down this plane must be held accountable and brought to justice," said EU foreign-policy chief Catherine Ashton.

Anger among Europeans over the shooting down of the plane, which led to the deaths of nearly 300 people, was evident at the meeting, the first EU gathering since the tragedy last week.

British Foreign Secretary Philip Hammond said "the world has changed," and Lithuanian Foreign Minister Linas Linkevicius criticized the EU for "inaction" and said it needs to "wake up."

Mr. Linkevicius, along with Swedish Foreign Minister Carl Bildt, was among those calling for an arms embargo on Russia, saying it was illogical to denounce military aggression while continuing to arm the aggressor.

"I saw T-64s on the streets of Donetsk yesterday, modernized T-64s on the street of Donetsk," Mr. Bildt said. "You don't buy them at the local grocery store. We know where they're coming from. They're coming in increasing numbers from across the border--in spite of commitments, in spite of our talks."

Behind the scenes, the debate was colored by a fear that harsher actions could prompt the separatists who control the crash site to make it harder for international workers to recover the passengers' bodies, though progress in recovering the bodies was reported in the hours before the meeting.

Dutch Foreign Minister Frans Timmermans flew to Brussels from New York after an emotional speech the previous night before the United Nations Security Council. Mr. Timmermans suggested the Netherlands and Europe now had to accept the economic consequences of imposing harder-line sanctions on Russia.

"This is no longer a question of the economy and trade," he said. "This is a question of security, it's a question of Europe's geostrategic position, and it's a question of justice for the nearly 200 Dutch people who lost their lives."

Since Russia annexed the Ukrainian region of Crimea in March, the EU's 28 members have wrestled with how strongly to respond. Many European countries receive most or all of their energy from Russia, and they fear the consequences of sanctions and possible retaliation from Moscow.

EU leaders settled on a policy of steady but incremental measures, but the approach attracted criticism even from some of the bloc's own members, especially since the U.S. has imposed stronger penalties.

Some ministers said on Tuesday that Europe's approach must change, and that it is now clear that Moscow is an adversary rather than a partner.

"I believe it's really, really important to wake up a little bit," Mr. Linkevicius said. "Our inaction is also sometimes part of the problem....There must be a turning point in our mind-set. I don't know what else should happen for us to know with whom we are dealing."

But other developments showed the difficulties in taking stronger action. French President François Hollande made it clear that France was forging ahead with plans to deliver the first of two warships to Russia, though he cast new doubt over the delivery of the second.

German Foreign Minister Frank-Walter Steinmeier said any new restriction on defense-related items would likely cover only future contracts.

Ukrainian Foreign Minister Pavlo Klimkin, in Brussels to meet his counterparts, said the French sale violates EU policy, which requires countries to consider the potential that arms they sell can be used against neighboring countries.

Mr. Klimkin added that he favors arms restrictions on Russia. "We very much hope that a number of steps in this direction will be taken," he said.

The EU foreign ministers agreed on Tuesday to target individuals and groups that provide "financial or material" support to Russia's decision makers. That decision had been foreshadowed by a meeting of EU heads of state and government last week.

But the warning about imposing trade restrictions on defense, energy and high-tech items was unexpected. The ministers asked EU staffers to prepare a proposal for such a move by Thursday, and signaled they could move ahead within a week if they don't see more cooperation from Russia and the separatists.

Before this week, the EU had sanctioned 72 Russians and separatists, plus two Crimean energy firms.

Mr. Klimkin said the precise sanctions are less important than sending a message that the EU fully supports Ukraine. "For me, it's about the European Union speaking with one clear voice," he said.

More European ministers were willing to blame Russia directly for the crash, citing reports that Moscow has allowed large amounts heavy weaponry to flow over its border to the Ukrainian separatists. The North Atlantic Treaty Organization has warned of this weapons flow and said Russia has rebuilt its force on the Ukrainian border to 10,000-12,000 troops, after reducing it to less than 1,000 in mid-June.

Among the ministers calling for an arms embargo were those from Lithuania, Latvia, Sweden, and Austria. Mr. Linkevicius, of Lithuania, also said the EU should place the so-called Republics of Luhansk and Donetsk--Ukrainian enclaves run by pro-Russian separatists--on the bloc's list of terrorist groups.

Mr. Hammond, whose country has been outspoken in favor of a tough response to the crash, wasn't specific about which measures should be taken, but he signaled before the meeting that the EU should toughen its approach.

"The events of the last few days have changed public expectations of us, " Mr. Hammond said. "We must signal...that we recognize that and we are going to go further as a consequence."

But Mr. Bildt hinted at the difficulty of presenting a unified front among the EU's 28 nations, even in the face of a tragedy that killed numerous European citizens.

"If we stay together, the Americans and the Europeans, we can handle the situation," Mr. Bildt said. "If we are weak and divided, it's going to be even harder."

Laurence Normanand Gabriele Steinhausercontributed to this article.

Write to Naftali Bendavid at naftali.bendavid@wsj.com and Matthew Dalton at Matthew.Dalton@wsj.com