* U.S. stock futures down 1.0 pct, Japan's Nikkei falls over 2 pct
* Yen, Swiss franc gain on safe-haven plays, euro pressured
* Oil prices shoot up on gas supply concerns
TOKYO, March 3 (Reuters) - Stock prices plummeted while oil prices shot up on Monday as escalating tensions between Russia and the West after Russia bloodlessly seized a part of Ukraine.
Kiev mobilised for war on Sunday after Russia declared its right to invade its neighbour, with their forces already controlling strategically important Crimea, an isolated Black Sea peninsula where Moscow has a naval base.
The Group of Seven countries (G7) condemned Russia's move, cancelling for now preparations for the G8 summit that includes Russia and had been scheduled to take place in Sochi in June.
U.S. stock futures fell 1.0 percent from a record high hit on Friday while Japan's Nikkei average tumbled 2.3 percent. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.0 percent.
"It's a reaction to the escalation in tension in Ukraine over the weekend ... the traditional risk proxies are getting hit, and the safe havens are getting bid," said ANZ currency strategist Sam Tuck in Auckland.
The dollar dropped to as low as 101.255 yen, its weakest in almost a month, and last traded at 101.36 yen, about 0.4 percent below levels late last week.
Against the Swiss franc, another traditional safe-haven currency, the dollar slipped near Friday's two-year low of 0.8782 franc.
"No one wants a full confrontation between the NATO and Russia. That's the worst scenario. Even Putin would probably not want it," said a senior proprietary trader at a Japanese bank.
"My hunch is that, in the end, the West will be resigned that Crimea falls into the hands of Russia, given the historical background. But it will take some time, at least a month, for the issue to be quieted down. Until that will have happened, the markets will be unstable," he added.
The euro also shed 0.2 percent against the dollar to $1.3778 , slipping from Friday's two-month high as the euro zone economy is seen as vulnerable because of its dependence on gas supplies from Russia via Ukraine.
Concerns about gas supply disruption as well as threats of war were enough to boost oil prices sharply.
Brent crude, the European oil benchmark, rose as much as two percent to a two-month high of $111.24 per barrel .
The U.S. crude futures hit a five-month high of $104.65.
On top of concerns about a military confrontation, it was not clear Ukraine's new interim government, formed only about a week ago after pro-Russian former President Viktor Yanukovich had been ousted, can secure funds to avoid default.
Kiev has said it needs $35 billion over two years to avoid default, and may need $4 billion immediately. But Ukrainian Finance Minister Oleksander Shlapak said on Saturday the country is unlikely to receive financial assistance from the International Monetary Fund before April.
Concerns over Ukraine sent the 10-year U.S. debt yield falling to one-month low of 2.592 percent, compared to 2.66 percent late last week, ahead of release of important economic data this week, including manufacturing data on Monday and payrolls data on Friday.