Vladimir Putin was speaking live on Russian TV after a clash in Mariupol, eastern Ukraine, in which three pro-Russian protesters were reportedly killed.
He said he hoped the crisis would be resolved through dialogue.
Talks have opened in Geneva between Russia, Ukraine, the EU and US – the first since unrest erupted in Crimea.
In his annual live television phone-in, Vladimir Putin warned the Ukrainian authorities of “the abyss they’re heading into” and urged dialogue.
Vladimir Putin also admitted for the first time that Russian forces had been active in Crimea, which was annexed by Moscow last month. Previously he had insisted that the camouflaged, masked gunmen who took over Crimea were a local “self-defense” force.
The West says Russia is aiding the pro-Russian activists now occupying dozens of official buildings in Ukraine’s eastern Donetsk region.
Vladimir Putin dismissed as “rubbish” allegations that Russian special forces were operating there.
Russian-speakers are a majority in Crimea and Donetsk, where ties to Russia are strong. Vladimir Putin reminded viewers that Tsarist Russia used to call eastern Ukraine “New Russia”.
“The Federation Council [upper house of parliament] granted the president the right to use military force in Ukraine. I really hope that I do not have to exercise that right and that we are able to solve all today’s pressing issues via political and diplomatic means,” Vladimir Putin said.
He said the Kiev government, which had “seized power”, had only spoken to its own appointees in the region, but “not to the people whom locals trust”.
Meanwhile, Ukraine’s State Border Service has been quoted by the Interfax-Ukraine news agency as saying that it is “significantly” restricting entry into the country by adult men from Russia because of the risk of “acts of terror”.
Overnight about 300 pro-Russian separatists attacked a military unit in Mariupol near the Azov Sea, throwing petrol bombs. Troops had opened fire, killing three, Ukraine’s Interior Minister Arsen Avakov said in a post on his Facebook page.
Ukraine has now sent in reinforcements including helicopters. There was no independent confirmation of Arsen Avakov’s statement.
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