Nato's ruling council will hold an emergency session today after Turkey shot down a Russian warplane it claimed had entered its airspace.
The North Atlantic Council will meet this afternoon in Brussels in response to the downing of the aircraft by Nato member Turkey.
Ankara claimed its F-16s shot down the Russian plane after it ignored repeated warnings over the violation of Turkish airspace.
But Moscow said the Su-24 jet was downed by artillery fire while on a bombing mission in Syria and had not strayed across the border.
The Russian defence ministry statement said: "We are looking into the circumstances of the crash of the Russian jet. The Ministry of Defence would like to stress that the plane was over the Syrian territory throughout the flight."
In a carefully-worded statement the Foreign Office said the jet was shot down "near the Turkish-Syrian border" without specifying which country the plane was in at the time of the incident.
A spokeswoman said: "Clearly this is a very serious incident but it would be unwise to comment further until we have more certainty on the facts."
Nato confirmed that an "extraordinary meeting if the North Atlantic Council" would be held at 4pm GMT.
Middle East analyst Shashank Joshi said the incident added to the "toxic cocktail" in the region.
Mr Joshi, from the Royal United Services Institute, said the skies over Syria and Turkey are an "incredibly crowded airspace", with planes from both nations and members of the US-led coalition against IS - including the UK - operating.
Turkey, a Nato member, has already complained about Russian incursions into its skies and last month the alliance condemned the "unacceptable violations of Turkish airspace by Russian combat aircraft".
Mr Joshi said: "The situation is dangerous because Russia is quite probably deliberately probing Turkish airspace both for military reasons and political reasons."
The Russians will be testing the military responses of the Nato member, but also carrying out the same "psychological intimidation" tactics used in the Baltic and North Atlantic, he suggested.
The combination of the crowded airspace, Russian probing tactics and the diplomatic tensions create a "real toxic cocktail that can easily erupt into crisis", he warned.
Ankara will be "furious" at the incursion and Russia can expect Nato to strike a "tough" note, but behind the scenes there will be intense diplomatic efforts to calm tensions.
But if Moscow responds in a provocative way, there is a risk of the crisis escalating.
Mr Joshi warned: "These things always proceed in a very unpredictable fashion. We have seen how conflicts can begin when there are large alliances."
Russia's participation in the Syrian peace process talks in Vienna, the co-operation on the UN Security Council resolution and meetings between Russian president Vladimir Putin and Nato leaders provided signs of a renewed diplomatic engagement between Moscow and the West in recent weeks.
French president Francois Hollande will meet Mr Putin on Thursday and Russia has offered co-operation in the fight against IS following the atrocities in Paris and the downing of a Russian passenger jet in Egypt.
The incident comes as David Cameron prepares to set out the case for RAF air strikes in Syria.
The Prime Minister will set out a plan on Thursday to tackle IS - also known as Isil, Isis or Daesh - in its Syrian stronghold.
He told the Commons on Monday that he would let MPs consider his proposals over the weekend before a debate and vote on British military involvement in Syria.
"I do not want anyone to feel that they are being bounced into a decision," he said. "I want this House to take the decision deliberately, but we should not take too long over it."