President Vladimir Putin said on Thursday a U.S. law that punishes Russians who abuse human rights was poisoning ties with Washington but signalled support for a retaliatory ban on Americans adopting Russian children.
In comments broadcast live to the nation, Putin, 60, also laughed off speculation that he was in bad health and said Russia's economy was in good shape.
Putin struck a hawkish tone in his first annual news conference since he returned to the presidency in May for a six-year term, after four years as prime minister, and presented himself as the guarantor of stability after months of protests.
He said he regretted new legislation signed by President Barack Obama last week that will punish Russians accused of violating human rights by refusing them visas and freezing their assets in the United States.
"This is very bad. This, of course, poisons our relationship," he said.
Putin and Obama have indicated they want to warm up ties following their presidential election victories this year but the spat over human rights endangers those efforts.
Despite the threat, Putin indicated he would sign into law a tit-for-tat move by Russia's lower house of parliament that would stop Americans adopting Russian children and bar entry to Americans who abuse Russians' rights.
"It is an emotional response by the State Duma (lower house of parliament) but it is an appropriate response," Putin said.
The feud began when the U.S. Congress approved a trade bill that orders the United States, Moscow's former Cold War enemy, to deny visas to Russian human rights violators. It was drawn up because of concern over the death in a Russian prison of anti-corruption lawyer Sergei Magnitsky in 2009.
Putin backed the original Duma bill but has signalled he wants to contain the dispute with Obama's administration. The Kremlin says Obama will visit Russia early next year.
ECONOMY PERFORMING WELL
During his first spell as president from 2000 until 2008, Putin began a tradition of giving long annual news conferences to show his grasp of policy detail. The previous one, in 2008, ran for four hours and 40 minutes.
He appeared intent on showing he has a firm grip on Russia after the biggest protests since he began his 13-year domination of the country and to show he is strong and healthy.
The Kremlin has dismissed suggestions that Putin has serious health problems since he was seen limping at a September Asia-Pacific summit and Russian government sources told Reuters he was suffering from back trouble.
"This is only beneficial for political opponents who are trying to question the legitimacy and the effectiveness of the authorities," Putin said.
"I can give the traditional answer to the health question: there's no point in waiting."
Putin began the news conference by reeling off economic data for the world's ninth-largest economy, forecasting that it would grow by 3.7 percent this year.
"This is a good result overall," he said, suggesting that Russia's economy was performing well particularly if it was compared with the euro zone and the United States.
Putin said recession in the euro zone had acted as a drag on Russian growth and that a poor harvest had hit the economy in the third and fourth quarters, lifting inflation over 6 percent.
He expressed concern over a slowdown in industrial output growth. But he highlighted Russia's low unemployment rate of 5.3-5.4 percent, which he described as "good - one of the best in all the developed economies of the world".
(Additional reporting by Thomas Grove, Gabriela Baczynska and Nastassia Astrasheuskaya, Writing by Timothy Heritage, Editing by Douglas Busvine)