Biden, Putin begin talks after US warns of toughest sanctions yet if Russia invades Ukraine

US President Joe Biden (R) and Russian President Vladimir Putin (Image: AFP)

United States President Joe Biden began a video conference with Russian President Vladimir Putin on December 7, Russian state television said, after US officials warned Moscow could be hit with the toughest economic sanctions yet if it invades Ukraine.

The officials said the sanctions, which one source said could target Russia's biggest banks and Moscow's ability to convert roubles into dollars and other currencies, were designed to dissuade Putin from using tens of thousands of troops massed near the Ukrainian border to attack its southern neighbour.

The Kremlin, which said before the meeting it did not expect any breakthroughs, has denied harbouring such intentions and has said its troop posture is defensive.

But Moscow has voiced rising vexation over Western military aid to Ukraine, a fellow former Soviet republic that has tilted towards the West since a popular revolt toppled a pro-Russian president in 2014, and what it calls creeping NATO expansion.

Moscow has likewise questioned Ukrainian intentions and said it wants guarantees that Kyiv will not use force to try to retake territory lost in 2014 to Russia-backed separatists, a scenario Ukraine has ruled out.

"We're looking for good, predictable relations with the United States. Russia has never intended to attack anyone, but we have our concerns and we have our red lines," said Kremlin spokesperson Dmitry Peskov.

Calling for everyone to keep "a cool head", Peskov said it was vital that Putin and Biden speak given what he called the extraordinary escalation of tensions in Europe.

The Russian rouble weakened slightly on Tuesday, with some market analysts predicting the talks would de-escalate tensions and others saying that the U.S. sanctions threat eroded hopes of finding common ground.

Ahead of his first direct talks with Putin since July, Biden discussed the sanctions plan with European allies on Monday, seeking a strong joint stance in support of Ukraine's territorial integrity and sovereignty.

He spoke to French President Emmanuel Macron, German Chancellor Angela Merkel, Italian Prime Minister Mario Draghi and British Prime Minister Boris Johnson.

They called on Russia to defuse tensions and return to diplomacy and said their teams would stay in close touch, including in consultation with NATO allies and EU partners, on a "coordinated and comprehensive approach", the White House said.

Biden's team has identified a set of economic penalties to impose should Russia launch an invasion, a senior Biden administration official said.

A separate source familiar with the situation said targeting Putin's inner circle has been discussed but no decision made. Sanctions against Russia's biggest banks and curbing the conversion of roubles into dollars and other currencies were also being considered, another source said.