"Western sanctions will be a huge mistake, would rupture ties btw US and Russia" - Russian

According to the White House, the purpose of the talks was to set the tenor for security talks planned for Geneva in January. Mr Biden and Mr Putin saw areas of progress but also issues where agreement may be impossible.

According to report, Joe Biden and Vladimir Putin held a 50-minute phone call on Thursday in which Washington pushed for a diplomatic solution to the Ukraine crisis.

The US president told his Russian opposite number that substantive progress could only be made in an “environment of de-escalation," according to White House press secretary Jen Psaki.

The talks were described as “serious and substantive” with the two leaders agreeing to “pragmatic, results-driven diplomacy," she said, amid a Russian military build up on the Ukrainian border that has sparked fears of an imminent invasion.

The phone call, requested by President Putin, was the two leaders' second conversation this month and comes following increasingly belligerent rhetoric from Moscow.

“The upcoming talks would determine more precisely the contours of each of those categories. That's what diplomacy is. That's what negotiations are for,” the official added.

Mr Biden made clear the US will monitor the situation on the Ukraine border and will “respond decisively” if Russia invades.

The White House official added: “President Biden laid out two paths, two aspects of the US approach that will really depend on Russia's actions in the period ahead.

“One is a path of diplomacy leading toward a de-escalation of the situation, and the other is a path that's more focused on deterrence, including serious costs and consequences should Russia choose to proceed with a further invasion of Ukraine.”

The Kremlin, meanwhile, was happy with the talks, with an official saying they had created a “good atmosphere” ahead of the meeting in Geneva.

However, Russian officials said Mr Putin warned Mr Biden that western sanctions would be a huge mistake and would rupture ties between the US and Russia.

Ahead of the call, Mr Putin had sought to ease tensions with the US in a New Year’s greeting published by the Kremlin.

Mr Putin said: "I am confident that, following up on our agreements reached during the June summit in Geneva and subsequent meetings, we can move forward and establish an effective Russian-American dialogue based on mutual respect and consideration for each other’s national interests.”

In recent weeks Moscow’s rhetoric has become increasingly belligerent.

Russia has demanded a legal guarantee that Ukraine and other former Soviet nations will not be allowed to join Nato and it also wants the Alliance to cut back its military deployment in central and Eastern Europe.

The Kremlin warned it would be prepared to respond militarily if its concerns are ignored. Nato, however, has pushed back insisting it was only up to its members to decide who gets to join the Alliance.

Earlier this month, Mr Biden said he was willing to discuss Russia’s fears with Mr Putin, prompting alarm among Nato members, who feared he might strike a deal with Mr Putin behind their backs.

An unnamed senior US administration official earlier tried to assuage their fears.

“We will continue to coordinate closely with our allies and partners on all these matters,” the US official said. “We will proceed on the principle of ‘nothing about them without them’.”

President Biden would stress a non-military way for the Kremlin out of the impasse, the White House said.

Separately, Mr Putin said this week that the controversial Nord Stream 2 gas pipeline was ready to start exports now a second stretch of the pipeline has been filled.

Nord Stream 2, completed in September but awaiting regulatory approval from Germany and the European Union, faces resistance from the United States and several countries including Poland and Ukraine, which say it will increase Russia's leverage over Europe.

The Russian president said it would help to calm a surge in European gas prices.

Liz Truss, the Foreign Secretary, said Britain can help Ukraine wean itself off Russian oil and gas with access to leading green technologies.

Ms Truss wrote in a piece for Ukraine’s leading publication Ukrainska Pravda that London stood behind Kyiv and was willing to help it diversify its energy sources to reduce its reliance on Russia.

“We can make the most of Britain’s leading green innovative technologies such as wind and hydrogen energy so that Ukraine will be able to cut down its dependence on Russian fuel and spur up trade and investment,” she said.