The Kremlin strongman spoke out after a day of frayed nerves, with Russia test-firing a new generation intermediate-range missile at Ukraine -- which Putin hinted was capable of unleashing a nuclear payload.
Ukraine had earlier on Thursday accused Russia of firing an intercontinental ballistic missile (ICBM) for the first time in history at the central Ukrainian city of Dnipro, while the UN Secretary-General branded the new missile's use "worrying".
Ukraine's key backer the United States played down suggestions that Russia had launched an ICBM, echoing Putin's description of the "experimental" weapon.
Yet while stopping short of calling it "intercontinental", Britain warned the weapon had "a range of several thousand kilometres" -- enough to make good on Putin's threat of striking the West.
In a defiant address to the nation, Russia's president railed at Ukraine's allies granting permission for Kyiv to use Western-supplied weapons to strike targets on Russian territory, warning of retaliation.
In recent days Ukraine has fired US and UK-supplied missiles at Russian territory for the first time, escalating already sky-high tensions in the brutal nearly three-year-long conflict.
"We consider ourselves entitled to use our weapons against the military facilities of those countries that allow their weapons to be used against our facilities," Putin said.
He said the US-sent Army Tactical Missile System and British Storm Shadow payloads were shot down by Moscow's air defences, adding: "The goals that the enemy obviously set were not achieved".
Kremlin spokesman Dmitri Peskov did however say Russia was doing everything to avoid a nuclear conflict, having updated its nuclear doctrine this week.
- 'Crazy neighbour' -
The Ukrainian air force said Moscow had launched the missile as part of a barrage towards Dnipro, where local authorities said an infrastructure facility was hit and two civilians were wounded.
Ukrainian President Volodymyr Zelensky said experts were examining evidence before confirming an intercontinental ballistic missile had been fired by "our crazy neighbour".
He said that the attack bore "all the characteristics" of an ICBM attack and accused the Kremlin of "using Ukraine as a testing ground".
Putin said that Russia had carried out "testing in combat conditions of one of the newest Russian mid-range missile systems... Our engineers named it 'Oreshnik'," meaning "Hazel".
The attack on Dnipro comes just days after several foreign embassies shuttered temporarily in the Ukrainian capital, citing the threat of a large-scale strike.
"It is another example of reckless behaviour from Russia, which only serves to strengthen our resolve in terms of standing by Ukraine for as long as it takes," a spokesman for British Prime Minister Keir Starmer told reporters.
The spokesman for UN Secretary-General Antonio Guterres, Stephane Dujarric, said the new missile's deployment was "another concerning and worrying development," warning the war was "going in the wrong direction".
Yet a US official played down the threat, saying on condition of anonymity that the missile used was not an ICBM but an "experimental medium-range ballistic missile" -- seemingly confirmed by Putin's address.
Russia "likely possesses only a handful of these", the official added.
- 'Political value' -
Ukraine's air force said it had downed missiles launched on the industrial city, without elaborating on whether the new missile was among those downed.
The head of the Dnipropetrovsk region where the city of Dnipro is located said the Russian aerial bombardment damaged a rehabilitation centre and several homes, as well as an industrial enterprise.
"Two people were wounded -- a 57-year-old man was treated on the scene and a 42-year-old woman was hospitalised," said the official, Sergiy Lysak.
Fabian Hoffmann, a research fellow at the University of Oslo, who specialises in missile technology, said Russia had nothing to gain militarily by using an ICBM in such an attack.
"This is all about the political effect. This is not about the military value," Hoffmann told AFP.
Russia and Ukraine have escalated their use of long-range missiles in recent days since Washington gave Kyiv permission to use its ATACMS against military targets inside Russia -- a long-standing Ukrainian request.
British media meanwhile reported on Wednesday that Kyiv had launched UK-supplied Storm Shadow missiles at targets in Russia after being given the green light from London.
Russia's envoy to London on Thursday said that meant Britain was "now directly involved" in the Ukraine war, with Andrei Kelin telling Sky News "this firing cannot happen" without UK and NATO support.
The defence ministry in Moscow said Thursday its air-defence systems had downed two Storm Shadows, without saying whether they had come down on Russian territory or in occupied Ukraine.
The missile escalation is coming at a critical moment on the ground for Ukraine, as its defences buckle under Russian pressure across the sprawling front line.
Russia claimed deeper advances in the war-battered Donetsk region, announcing on Thursday that its forces had captured another village close to Kurakhove, closing in on the town after months of steady advances.
Moscow's defence ministry said Russian forces had taken the small village of Dalne, five kilometres (three miles) south of Kurakhove.
Lysak, the governor of the Dnipropetrovsk region, said that 26 people had been wounded in another strike on the town of Kryvyi Rig, where Zelensky was born.
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