Ms Daly argued that sanctions will impose hardship on people who can least afford them and would not end the war in Ukraine
Speaking on RTÉ's European Parliament Report, Ms Daly argued that sanctions will impose hardship on people who can least afford them and would not end the war in Ukraine.
She also again called into question the role of NATO, who she accused of "provoking" the war.
"I believe negotiation is the only way,” Ms Daly said. "Now people have said, 'oh, you want Ukraine to surrender to Russia?' Absolutely not.
“But what I do not want to see is the situation which has unfolded and is much more out in the open now, of the country of Ukraine and citizens of Ukraine being used in a proxy war against Russia.”
However, MEP Billy Kelleher rejected calls for sanctions to be scrapped.
Speaking on the same programme, he said: "I was in Ukraine itself. I saw the flow of refugees. They weren't running from Ukrainian guns. They were running from Russian guns, from Russian artillery that has effectively targeted cities.
"I stood in a city that is demolished from Russian artillery, indiscriminate firing, literally killing civilians at will. So, I mean, the aggressor is Russia and we must do everything to try and wean ourselves off the fossil fuels that we purchase."
Mr Kelleher said European money was being used to fund "Putin's war" and that such funding should be cut off quickly.
Ms Daly and MEP Mick Wallace, whose stance on the War in Ukraine has previously created controversy, have also been slammed by Fine Gael MEP Colm Markey.
"You can't negotiate with an aggressor like that," Deputy Markey said. "The reality is, he has invaded Ukraine and he has caused all the destruction that's there. If you negotiate with someone like that, they'll do it again somewhere else. So you have to send the message loud and clear that that type of activity is not tolerated", he said.
Ms Daly said that while many people are unhappy with her response to the Russian War in Ukraine, she insisted that she has also received support both from Ireland and across Europe.
She condemned the invasion, adding that Russia was ultimately responsible, but added: "you can't ignore the role of NATO".
She said that "escalating the conflict with more arms and more sanctions and giving Russia, if you like, nowhere to go, but to escalate, is not in the interest of anybody in Ukraine".
The full episode of European Parliament Report will be broadcast on Saturday, 7 May, at 11.20am.