Speaking in a televised call-in show with the nation, Putin harshly criticized the West for trying to pull Ukraine into its orbit and said that people in eastern Ukraine have risen against the authorities in Kiev, who ignored their rights and legitimate demands.
A wave of protests, which Ukraine and the West said was organized by Russia and involved Russian special forces, have swept eastern Ukraine over the past weeks, with gunmen seizing government offices and police stations in at least 10 cities.
"It's all nonsense, there are no Russian units, special services or instructors in the east of Ukraine," Putin said.
At the same time, he recognized for the first time that soldiers in unmarked uniforms — dubbed "little green men" — who swept Ukraine's Black Sea region of Crimea laying the ground for its annexation by Moscow last month were Russian troops.
Putin, who previously said the troops were part of local self-defense forces, said the Russian soldiers' presence was necessary to protect the local population from armed radicals and to ensure the holding of a referendum, in which an overwhelming majority of its residents voted for seceding from Ukraine and joining Russia.
But asked on Thursday who the men in unmarked uniforms were, Putin said they were Russian servicemen who "stood behind the back of Crimea's self-defense forces."
"They acted politely, but resolutely and professionally," he said. "There was no other way to hold the referendum in an open, honest and honorable way and allow the people to express their opinion."
He said part of the motives behind the annexation of Crimea was the need to counter what he said was NATO's intention to make Ukraine a member and sharply limit Russia's presence in the Black Sea region.
Putin insisted that protests in the east of Ukraine only involve locals. He denounced the Ukrainian authorities' decision to use the military to uproot the protests in the east as a "grave crime," adding that he told his Western counterparts urging him to help disarm protesters in the east that the Ukrainian government should first pull the army back.
"They are sending tanks, armored personnel carriers and cannons there!" he said. "Have they gone nuts?"
He expressed hope for the success of Thursday's talks in Geneva that bring together the United States, the European Union, Russia and Ukraine for the first time since the Ukrainian crisis erupted.
"I think the start of today's talks is very important, as it's very important now to think together about how to overcome this situation and offer a real dialogue to the people," Putin said.
Russia has demanded that the new government in Kiev, which replaced the ousted pro-Russian President Viktor Yanukovych who fled to Russia following protests over his decision to spike a pact with the EU in favor of closer ties with Russia, move to transform the country into a loose federation. Ukraine has rejected the demand, but promised to give the regions more powers.
Putin repeated his argument that regions in eastern Ukraine historically had been part of the Russian empire and called Novorossiya before they were handed over to Ukraine by the Bolsheviks in the 1920s.
"God knows why," he said.
But he also seemed to keep the door open for Russia to recognize Ukraine's presidential election set for May 25, softening his previous demand that it must be postponed until the fall and preceded by a referendum on broader powers for the regions. He added that the primary goal is to ensure that people in the east should be offered clear guarantees of the protection of their rights.