Russian President Vladimir Putin said there is not yet a need to send Russian troops into Ukraine as he separately ordered troops taking part in military exercises in western Russia near the border with Ukraine to return to their bases.
But speaking during a press conference from his residence outside Moscow on Tuesday Putin said that Russia reserves the right to use "all means" necessary to protect its citizens in Ukraine.
"Neo-Nazis and anti-Semites are rampant in Ukraine and particularly in Kiev (and) people in eastern Russia are worried," Putin said.
He said the use of force would be a "last resort" and that he is not considering, as some had feared, the annexation of Crimea.
He expressed the view that Crimea should have the right to self-determination and that whatever else may happen to Ukraine's ousted leader Viktor Yanukovych, his political future was likely over.
"He would have been killed in Ukraine had we not helped him," Putin said of Yanukovych, who surfaced in Moscow last week after fleeing Kiev.
In wide-ranging comments, Putin also accused the West of double standards.
"Our actions are often described by the West as not legitimate, but look at the U.S. operations in Afghanistan, Iraq and Libya. Our actions are legitimate from the point of view of international law because Ukraine's president asked us for help."
Earlier, the Interfax and RIA-Novosti news agencies, attributing their information to Dmitry Peskov, Putin's spokesman, reported that Putin had ordered Russian troops staging training exercises on the nation's western flank to return to their barracks.
However, no explicit mention was made in the statement of the estimated 16,000 Russian troops thought to be in Crimea, and the development comes amid reports of a confrontation between Ukrainian and Russian forces near the Belbek air base.
Attempts by USA TODAY to reach Peskov to confirm if the move was an attempt to de-escalate tensions in the strategic Crimean peninsula were not immediately successful. Putin did not mention the pullback in his comments in Moscow Tuesday.
Still, pro-Russian troops who have taken control of the airbase fired warning shots into the air as around 300 Ukrainian soldiers, who previously manned the airfield, demanded their jobs back, the Associated Press and others reported. Video footage obtained by the BBC appeared to confirm the encounter.
A journalist for the Israeli newspaper Haaretz wrote separately on Twitter that "Crimeans are coming to [Belbek] base to try and evict the Ukrainian soldiers."
The shots, reflecting the tense atmosphere that has taken hold in the Crimea, are the first ones fired in the standoff that has threatened to entangle the West and that is casting doubt on Ukraine's future. There were no reports of injuries and the incident appears to be an isolated one, but the tense deadlock still appears to be going on.
On Monday, a Russian admiral issued an ultimatum to Ukraine's military in Crimea, later denied by Russian officials, to surrender at dawn Tuesday. At that point, Moscow had said the crisis could be defused if the country agreed to take back its Yanukovych.
But that deadline appears to have mostly passed without incident.
Amid rising international tensions, the Pentagon has halted all military cooperation with Russia, including exercises and meetings, Rear Adm. John Kirby said.
There were broader economic actions as well. U.S. Trade Representative Michael Froman's office said it suspended upcoming bilateral trade and investment talks with Russia.
"Due to recent events in Ukraine, we have suspended upcoming bilateral trade and investment engagement with the Government of Russia that were part of a move toward deeper commercial and trade ties," the Froman's office said in a statement.
Putin said Tuesday that sanctions against Russia would be counter-productive and that the reason for recent market unease was related to the monetary policy adopted by the Federal Reserve, and not specifically related to what is going on in Ukraine.
Global markets fell sharply on Monday as the crisis appeared to be on the verge of spinning out of control, but have since reversed some of the steep declines.
"Confidence in equity markets has been restored as the standoff between Ukraine and Russia is no longer on red alert," said David Madden, market analyst at IG.
Putin's comments come as Secretary of State John Kerry was on his way to Kiev Tuesday for talks there with the interim government, which the Kremlin does not recognize.
In Washington on Monday, President Obama said Russia is "on the wrong side of history'' by intervening in Ukraine. He said he is considering diplomatic and economic steps to isolate Moscow.
"Over time this will be a costly proposition for Russia, and now's the time for them to consider whether they can serve their interests in a way that resorts to diplomacy as opposed to force," Obama said from the Oval Office.
But Moscow reportedly shot back Tuesday. An unnamed Kremlin aide said that if the U.S. were to impose sanctions, Moscow may be forced to drop the dollar as a reserve currency, Reuters reported. Russia also reversed an earlier decision to lift a ban on pork imports from the U.S., saying the existing U.S. system of checks don't guarantee its safety, the Associated Press reported.
Russia's leading natural-gas producer Gazprom said that it would remove Ukraine's heavily-discounted gas prices from April.
On Thursday, European Union leaders are expected to hold an emergency meeting to decide whether to impose sanctions on Russia.
Contributing: William M. Welch