Vladimir Putin accused Ukraine on Wednesday of using terrorist tactics to try to provoke a new conflict and destabilize annexed Crimea after Russia said it had thwarted two armed Ukrainian attempts to get saboteurs into the contested peninsula.

Russia's FSB security service said two people were killed in clashes and its forces had dismantled a Ukrainian spy network inside Crimea. Kiev denied the assertions, calling them an attempt by Moscow to create an excuse to escalate toward a war.

The Russian president accused Kiev of playing a dangerous game and said he saw no point in holding a new round of talks about the troubled peace process in eastern Ukraine on the sidelines of a G20 summit in China next month.

"The people who seized power in Kiev ... have switched to terror tactics instead of searching for ways for a peaceful settlement," Putin told a news conference, saying Russia would not let such actions pass without a response.

"The attempt to provoke an outbreak of violence, to provoke a conflict is nothing other than a desire to distract (Ukrainian) society from its problems," he added, calling Ukraine's actions "criminal."

Putin's comments will stir fears that Russia, which has been steadily reinforcing Crimea militarily, may be considering new military action.

"Putin wants more war. Russia escalates, desperately looks for a casus belli against Ukraine, tests the West's reaction," a spokesman for Ukraine's foreign ministry, Dmytro Kuleba, tweeted.

The Russian allegations follow an uptick in Russian military activity in northern Crimea and heavier fighting in eastern Ukraine, where Ukrainian government troops are battling pro-Russian separatists.

If true, the events - which the FSB said involved at least two armed clashes on the border between Crimea and Ukraine - would be the most serious escalation on the contested peninsula since Moscow annexed it from Ukraine in 2014.

U.S. and European Union sanctions to punish Russia for the land grab remain in place, though Moscow has made clear it has no intention of handing the peninsula back to Ukraine.

The FSB said it believed Ukrainian special forces had been planning attacks targeting critical infrastructure.

An FSB employee and a Russian soldier were killed in the clashes, it said.

"The aim of this subversive activity and terrorist acts was to destabilize the socio-political situation in the region ahead of preparations and the holding of elections," the FSB said, referring to Russia-wide parliamentary elections next month.

The FSB said it had tackled one group of Ukrainian saboteurs in an operation that spanned late Saturday and early Sunday, smashing what it called a Ukrainian spy network.

Ukraine and Russian nationals were arrested and an arms cache, including 20 homemade explosive devices, ammunition, mines, grenades and specialized weapons commonly used by Ukrainian special forces, were recovered, it said.

The FSB said the situation escalated further late on Sunday and in the early hours of Monday.

"Ukrainian special forces units tried to break through two more times with groups of saboteur-terrorists but were thwarted by FSB units and other forces," it said.

"The attempts to break through were accompanied by massive covering fire from the neighboring state and from Ukrainian armored vehicles."

Security had been beefed up in areas popular with tourists, at key infrastructure and along the Crimea border, the FSB said.

U.S. officials are monitoring the situation, but have yet to drawn any conclusion about Russia’s intentions, said a U.S. official, who spoke on condition of anonymity.