Russia issues decree recognising Crimea as sovereign state as US and EU enact measures against 32 Russians and Ukrainians

The US and the European Union retaliated over the Crimea referendum by targeting sanctions against Russian and Ukrainian officials on Monday, a move widely greeted with scepticism as "toothless".

The White House imposed sanctions against 11 named individuals: seven senior Russian politicians and officials and four Crimea-based separatist leaders accused of undermining the "democratic processes and institutions in Ukraine".

But the US pointedly avoided targeting the Russian president, Vladimir Putin, or key figures in his inner circle.

The EU imposed sanctions on 21 individuals, including three senior Russian commanders, the prime minister of Crimea, a deputy speaker of the Duma and other senior officials.

There are divisions within Europe over how to respond to Russia, and this is reflected in the fact that action is being taken against less than two dozen from an original proposed list of 120.

The sanctions came on the eve of an address to the Russian parliament by President Vladimir Putin on the next moves for Crimea.On Monday night, Putin posted a decree on the Kremlin website, recognising Crimea as a sovereign state – in what appeared to be a first step toward integrating Crimea as a part of the Russian Federation. The decree, which took effect immediately, says Moscow's recognition of Crimea as independent is based on "the will of the people of Crimea".

Putin pressed ahead on Tuesday, informing his government and parliament of the Crimean leadership's proposal to join Russia ahead of an expected address to parliament.

Barack Obama, who is set to visit Europe next week to discuss the crisis with European allies, warned of further action. "If Russia continues to interfere in Ukraine, we stand ready to impose further sanctions," he said. Russian troops have also massed near the border with Russian-speaking eastern Ukraine where there have been fatalities during clashes between pro- and anti-Moscow demonstrators in recent days.

Obama added: "We will continue to make clear to Russia that further provocations will achieve nothing except to further isolate Russia and diminish its place in the world."

The White House insisted the sanctions were "by far and away the most comprehensive sanctions since the end of the cold war" and rejected criticism that they were too limited in scope or would be easily circumvented by asset transfers.

"We think they will be effective," one senior administration official told reporters in Washington. But the kind of sanctions that might bite, such as hitting Russian oligarchs or even their companies, particularly energy firms, were pointedly absent.

Officials in Washington suggested results showing 96.8% of those voting in favour of joining Russia and a 83.1% turnout were implausibly high, especially when an estimated 99% of Crimean Tatars refused to take part.

White House sources also claimed it was suspicious that there was not a single complaint to election authorities, and have promised extra funding to help make sure there is a record number of international observers present when Ukraine holds its national elections in May.

The EU condemned the referendum as illegal and said it would not recognise the outcome.

The Crimean parliament, in the aftermath of the referendum, declared independence from Ukraine on Monday and confiscated Ukrainian state property. Crimea also sent a delegation to Moscow to discuss what will happen next.

Moscow treated the sanctions with derision. The Russian deputy prime minister, Dmitry Rogozin, who faces sanctions on the US list, was dismissive, tweeting that the move drawn up by Obama must have been the work of a "prankster".

The Russian market was equally dismissive, with the rouble doing well on the day. Markets elsewhere in Europe rose, judging that the prospect of trade battles was receding.

Kathleen Brooks, research director at Forex.com, told AP: "So far the sanctions seem fairly toothless and much less severe than had been expected last week. From the market's perspective, the biggest risk was that the referendum would trigger tough sanctions against Russia that could lead to another cold war."

David Cameron's spokesman, asked whether the sanctions were feeble, said they should be seen in the context of others already announced and that the EU was prepared to add to them if necessary. Asked about Rogozin's response, the spokesman insisted the sanctions were "important measures".

Asked what would happen if Russia goes into eastern Ukraine, the spokesman said: "What we are saying very clearly is that they should not escalate."

The relative weakness of the sanctions may reflect a sense in the US and European governments that Crimea is already lost and the focus should be on preventing a Russian takeover of major population centres in eastern Ukraine.

Increasing the numbers on the sanctions list is almost certain to be discussed at the EU summit on Thursday and Friday. Some EU states are torn about taking punitive measures against Russia for fear of undoing years of patient attempts to establish closer ties with Moscow and increase trade. The EU has already suspended talks with Russia on an economic pact and a visa agreement.

A meeting of EU foreign ministers in Brussels decided on the reprisals following non-stop talks over the weekend until late on Sunday.

Senior EU officials expect the Kremlin to retaliate in a tit-for-tat sanctions war that is likely to spiral.

A senior EU official warned on Monday that the EU's 28 member states and Ukraine could run out of gas by the end of October if Russia plays "energy politics" and cuts off supplies in the diplomatic war over the future of Crimea.

A survey of gas supplies in the EU, conducted in the wake of the Russian occupation, found that the EU has 40bn cubic metres in its energy supplies – enough to last until the onset of winter.

The EU official said of a cut in Russian energy supplies: "We are under no illusions: come next winter, yes, we would have a significant problem.

But, the official added, "the silver lining is if you were going to go [into] Crimea from a gas politics point of view – doing it in March, February wasn't perhaps the cleverest move.

EU leaders are to meet in Brussels on Thursday for a summit dominated by Ukraine and could agree to lengthen the blacklist.

European ministers and EU officials said the 21 people – mainly political rather than business figures – would face a freeze on assets as well as a travel ban. That number could be expanded later in the week, they added.

Sanctions legislation published on Monday on the website of the Official Journal of the European Union named 8 Ukrainian officials and 13 Russian officials. Like the US list, the EU list included the Crimean prime minister, Sergei Aksyonov, parliament speaker Vladimir Konstantinov; and Russian state Duma deputies Andrei Klishas and Leonid Slutsky. In addition, however, it targeted more prominent Russian politicians than the US sanctions, including Duma deputy speaker Sergei Zheleznyak, who has made numerous public appearances to comment on the Kremlin line in support of Crimea, and Sergei Mironov, leader of the party A Just Russia who has also called for Russian intervention in Ukraine and initiated legislation to speed up the process of obtaining Russian citizenship for Ukrainians. Most of the Russian politicians were sanctioned for supporting the deployment of Russian forces in Ukraine on 1 March, the list said.

The EU sanctions also targeted Deniz Berezovsky, the Ukrainian naval commander who joined Crimean forces, and Russian military commanders Alexander Vitko, Anatoly Sidorov and Alexander Galkin, who the legislation claimed led the Crimea deployment.

It is notoriously difficult to secure EU agreement on sanctions because they require unanimity from the 28 member states. There were wide differences over the numbers of Russians and Crimeans to be punished, with countries such as Greece, Cyprus, Bulgaria and Spain reluctant to penalise Moscow for fear of closing down channels of dialogue.

The Dutch foreign minister, Frans Timmermans, described sanctions as inevitable, saying: "I hope the Russians will realise that sanctions will hurt everyone, but no one more than the Russians themselves."

The aim of some members is to gradually increase sanctions, just as the EU did with Iran, to put pressure on Putin rather than apply all the pressure now.

The German foreign minister, Frank-Walter Steinmeier, said any measure must leave "ways and possibilities open to prevent a further escalation that could lead to the division of Europe".

EU member states are threatening to move to broader economic and trade blocks on the Russians, leading to fears of a full-blown trade war that could be ruinous to both sides.

The Hungarian government warned of a "long economic war" between Russia and the EU, while the Polish foreign minister, Radek Sikorski, described the Kremlin's effective land grab in Ukraine as an 'anschluss' or annexation, using the term coined to describe Hitler's takeover of Austria in 1938.

"The EU does not recognise the illegal 'referendum' and its outcome," a statement said following the Brussels meeting. "It was held in the visible presence of armed soldiers under conditions of intimidation of civic activists and journalists, blacking out of Ukrainian television channels and obstruction of civilian traffic in and out of Crimea."

The Lithuanian foreign minister, Linas Linkevicius, predicted that Thursday's European summit, which will be dominated by the Ukraine crisis, would expand the sanctions against Russia.

"The targeted sanctions against Russia are just the beginning as long as Russia does not change its strategy of gradual escalation," said the leading German christian democratic MEP, Elmar Brok. "These measures include an embargo on munitions and dual-use technologies, as well as measures against Russian companies and their subsidiaries."

The EU and Ukraine are scheduled to sign the political part of their association pact at the summit on Friday.

Ukraine's foreign minister, Andriy Deshchytsya, visited Nato headquarters on Monday and was promised "increased ties with Ukraine's political and military leadership."

Nato, in a statement, described the referendum as "illegal and illegitimate".

The US alleged a series of specific irregularities in the conduct of the referendum, but there is no suggestion they would have been enough to change the outcome of a vote given the wider political and military circumstances.

"There has been broad speculation and some concrete evidence that ballots have arrived in Crimea for the referendum and had been pre-marked in many cities," said a senior US administration official.

"There are massive anomalies in the vote, even as it is recorded, including the fact that, based on the census in Sevastopol city, 123% of the Sevastopol population would have had to have voted yes for the referendum."

Additional reporting by Ian Traynor in Vienna, Rowena Mason and Nicholas Watt