According to a Kremlin statement, the decree recognizes "the Republic of Crimea, in which the city of Sevastapol enjoys special status, as a sovereign and independent state."

The statement said the decree was issued "considering the expression of the will of the people of Crimea at the general Crimean referendum, which was held on March 16, 2014."

The decree appears to be a first formal step by Putin to integrate Crimea into the Russian Federation after the region declared itself an independent state earlier on Monday.

It applied to join Russia following Sunday's referendum in which 96.77 percent of voters said they were in favor of seceding from Ukraine.

The outcome of the vote was greeted by cheering ethnic Russians in the Crimean capital Simferopol, but was rejected outright by Western leaders as illegal and unconstitutional.

The EU and US have announced a series of sanctions against individuals allegedly involved in Crimea's secession bid.

Thousands of pro-Russian forces took control of the region last month following the ouster Kremlin ally, President Vikor Yanukovych after mass rallies in Kiev.

Moscow has said it aims to protect Crimea's majority Russian-speaking population although denies the troops are under its control.

Sanctions decision not taken 'lightly'

On Monday the US said seven Russian officials, including advisers to President Vladimir Putin, would have assets frozen. Four Ukrainians, including Yanukovych himself, would also be targeted.

The sanctions came with a warning from US President Barack Obama, who said Russia would face further isolation should it "continue to interfere in Ukraine."

"We'll continue to make clear to Russia that further provocations will achieve nothing except to further isolate Russia and diminish its place in the world," he said.

He added, however, that the situation could see be solved through diplomatic means.

Sanctions imposed by the European Union target 21 people - 13 from Russia and eight from Ukraine - who it says are linked to the unrest.

Chancellor Angela Merkel said the decision to push ahead with the measures had not been taken "lightly."

"It wasn't our aim. We wanted talks and a diplomatic solution but the clear violation of international law yesterday with the so-called referendum meant we had to take this step and I am glad that Europe showed such unity."

ccp/rc (AFP, Reuters)