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The barbed exchanges, a sign of the escalating tensions between Washington and Moscow, came as Putin delivered his first public remarks on the crisis - ruling out a war days after his forces took control of the Ukrainian peninsula of Crimea, but reserving the right to use force to protect Russian speakers in the east of the country "as a last resort".
Comment: You can hear and read what Putin had to say on the matter here: A true statesman: Vladimir Putin press conference, March 4, 2014 - video and transcript
Speaking from his country residence outside Moscow, Putin gave a robust performance during which he portrayed Kiev as being in the grip of "terror, extremists and nationalists" rampaging on the streets. Putin described what is broadly seen as a Russian land grab in Crimea as "a humanitarian mission".
Obama and John Kerry, the US secretary of state, responded in apparent disbelief after Putin maintained there were no Russian forces occupying Crimea. "He really denied there were troops in Crimea?" said Kerry after arriving in Kiev, where he offered $1bn in loan guarantees to the new Ukraine government.
Kerry accused the Kremlin of "hiding its hand behind falsehoods, intimidation, and provocations".
Obama said: "There have been reports that Putin is pausing and reflecting on what's happened. There is a strong belief that Russian action is violating international law. Putin seems to have a different set of lawyers, but I don't think that is fooling anyone."
On the ground in Crimea tensions remained high, with Russian forces firing warning shots at unarmed Ukrainian soldiers marching on an airfield.
Following several days of drama that saw Ukraine's president toppled, a new government and interim head of state installed, and a Russian military seizure of Crimea, Putin said Moscow did not want to annex the territory.
"Regarding the deployment of troops, the use of armed forces. So far, there is no need for it, but the possibility remains," he said. "What can serve as a reason to use the armed forces? Such a measure would certainly be the very last resort."
But the Americans accused Putin of preparing to expand his control over the country. "It is clear that Russia has been working hard to create a pretext for being able to invade further," said Kerry.
The Americans are pushing for economic sanctions against the Kremlin elite and an EU emergency summit in Brussels on Thursday is also likely to decide on sanctions unless the Russians "de-escalate".
It may be that the language employed by Putin will be taken as de-escalation and reduce the pressure for punitive action against Russia - global markets rose in response to tentative signals that the Kremlin was not seeking to escalate the conflict.
Putin also warned that sanctions were a two-way street and that if Europe decided on that path, there would be a heavy cost to pay. EU trade with Russia is substantial, especially with Germany, more than 10 times the level of US-Russia trade, making it a lot less painful for Washington to decide on sanctions without fear of reprisals.
"We are not going to go to war with the Ukrainian people. But there is the Ukrainian army," Putin stated. "If we make this decision, we will make it for the people of Ukraine ... Ukraine is not only our closest neighbour. It is our fraternal neighbour. Our armed forces are brothers in arms, friends. They know each other personally. I'm sure Ukrainian and Russian military will not be on different sides of the barricades but on the same side."
The Russian leader strongly denounced the new administration in Kiev. He said he would refuse to recognize Ukrainian elections scheduled for the end of May. The acting president and government were illegitimate and Kiev was in the hands of "armed terrorists", of "nationalists and extremists".
"Our major concern is the ... nationalists and radical extremists that are rampant on the streets of Kiev," said Putin.
The deposed president, Viktor Yanukovych, who has fled to Russia leaving behind a lavish lifestyle in Kiev, remained the legitimate head of state, Putin insisted, although he also pronounced Yanukovych politically dead.
"There can be only one assessment of what happened in Kiev, in Ukraine in general. This was an anti-constitutional coup and the armed seizure of power," he said.
A week after Yanukovych's riot police killed dozens in Kiev and took fleeting control of a city centre square occupied since November by protesters, Putin retained the option of greater intervention on the basis of an alleged request from the toppled Yanukovych for Russian help. He contrasted that position with western behaviour.
"Our position is very different. Our position is completely legitimate. If we use force ... we have received a request from a legitimate president. Also we have hisorical and cultural ties with those people. And this is a humanitarian mission. It's not our goal to conquer somebody."
Ukrainian troops march to confront soldiers under Russian command occupying the Belbek airbase. Photograph: Sean Gallup/Getty Images
There were also signs of new negotiations on the crisis. Arseniy Yatseniuk, the acting Ukrainian prime minister, said his government was in touch with Russian ministers with a view to holding "consultations".
Kerry called for negotiations, while it appeared that international observers and mediators would be dispatched by the Organisation for Security and Co-operation in Europe, of which both Russia and Ukraine are members.
"I've spoken as directly to President Putin today as I can," said Kerry. "To invite him to engage in a legitimate and appropriate dialogue, particularly with the current government of Ukraine."
Obama said: "There is a suggestion that Russia's actions have been clever, but this has not been a sign of strength, rather a sign that countries near Russia have deep concerns about this kind of meddling and if anything it will push them further away from Russia."
There are said to be 16,000 Russian troops securing control of Crimea, where they enjoy broad backing from the majority ethnic-Russian population.
Putin said there were no Russian forces, merely local self-defence units. "There are many military uniforms. Go into any local shop and you can find one," he said. Putin also said he was continuing preparations to host a summit of the G8 countries in Sochi in June. All the other countries have frozen their preparations. While Washington has said Russia could be kicked out of the G8, Berlin is resisting such moves.
Putin was dismissive of the threats. "If the leaders don't want to come, fair enough," he said.
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