Russian President Vladimir Putin has defended the Kremlin's foreign policy, seen by western governments as aggressive, saying that its actions are necessary for his country's survival.

In his annual state-of-the-nation address at the Grand Kremlin palace on Thursday, Putin defended the annexation of Crimea in March and accused the West of using the crisis in Ukraine as a pretext to slap sanctions on Russia.

"The policy of containment wasn't thought up yesterday, it's been the plight of our country for many years. Whenever anyone thinks that Russia is getting too strong and independent, then these instruments are applied," Putin said.

Russia has also been accused of supplying pro-Russian separatists in eastern Ukraine with ammunition and manpower in a conflict that has killed more than 4,300 people.

In response, the European Union imposed several rounds of sanctions on Russia that targets Russia's finance, defence and energy sectors.

Counting the Cost - Russia: The cost of sanctions

Putin also pledged that Russia would not scale back its ties with the West despite bitter ongoing confrontation over the Ukraine crisis.

"Under no circumstances are we going to scale back our ties with Europe, US, at the same time we will revive and expand traditional ties with the south of the American continent, will continue cooperation with Africa, with countries in the Middle East," Putin said.

Meanwhile, Washington said it does not want to see Russia isolate itself "through its own actions," US Secretary of State John Kerry said on Thursday, calling on Moscow to help halt the raging Ukraine crisis.

"The United States and countries that support Ukraine's sovereignty and rights do not seek confrontation. It is not our design or desire that we see a Russia isolated through its own actions," Kerry told a meeting in Switzerland of top diplomats from the Organisation for Security and Cooperation in Europe (OSCE) nations.

The Russian leader is currently under pressure to show that his government has an answer for Russia's worsening economy, with sanctions and the falling price of energy exports sending the ruble into a tailspin, culminating in an acknowledgment this week by the government that the country is headed for recession.

Source: Agencies