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Vladimir Putin has invited the children of American diplomats in Russia to New Year and Christmas parties in the Kremlin - despite the US expelling 35 Russian diplomats.

The US had vowed new sanctions and closed two Russian compounds, in New York and Maryland, citing a 'campaign of harassment by Russia'.

The FBI and Department of Homeland Security directly accused Russian spies of hacking during the US election.

Despite the action taken by President Obama, Putin says he will not ban American diplomats from Russia.

In a statement released by Vladimir Putin, he instead invites the children of US diplomats in Russia to parties at the Kremlin.

Putin said: "The diplomats who are returning to Russia will spend the New Year’s holidays with their families and friends.

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"We will not create any problems for US diplomats. We will not expel anyone. We will not prevent their families and children from using their traditional leisure sites during the New Year’s holidays.

"Moreover, I invite all children of US diplomats accredited in Russia to the New Year and Christmas children’s parties in the Kremlin."

The Russian President accused Obama of being "provocative" and said the measures taken by the US were "aimed at further weakening the Russia-US relationship".

He added: "As it proceeds from international practice, Russia has reasons to respond in kind. Although we have the right to retaliate, we will not resort to irresponsible ‘kitchen’ diplomacy but will plan our further steps to restore Russian-US relations based on the policies of the Trump Administration."

He also said he wishes to "offer my New Year greetings to President Obama and his family" before adding "My season’s greetings also to President-elect Donald Trump and the American people.

"I wish all of you happiness and prosperity."

(Image: Getty)

A US official, speaking on condition of anonymity, said last night the Russian diplomats would be given 72 hours to leave the United States.

Access to the two compounds would be denied to all Russian officials as of noon local time on Friday, the official added.

"These actions were taken to respond to Russian harassment of American diplomats and actions by the diplomats that we have assessed to be not consistent with diplomatic practice," the official told Reuters.

According to the BBC, a Kremlin spokesman warned Russia's reaction would cause "significant discomfort" to US diplomats in its country.

(Image: AFP)

But he added Russia would not act "in haste" because Donald Trump - who has been more friendly to Russia than Obama so far - was a "factor [that] will certainly be taken into account", the BBC said.

A spokesman for Russian Mr Putin said a new round of US sanctions would harm relations between Moscow and Washington.

Dmitry Peskov said Mr Putin would order an "appropriate" retaliation to the sanctions, which included the expulsion of 35 diplomats.

(Image: Getty)

In a conference call with reporters, Peskov said Moscow doubted the effectiveness of the measures as the current US presidential administration was stepping down in three weeks.

Russia is thought to have hacked into US political institutions and individuals and leaked information in an effort to help President-elect Donald Trump and other Republican candidates.

Officials did not specify what actions President Obama has approved, but said targeted economic sanctions, indictments, leaking information to embarrass Russian officials or oligarchs, and restrictions on Russian diplomats in the US are among steps that have been discussed.

One decision that has been made is to avoid any moves that exceed the Russian election hacking and risk an escalating cyber conflict that could spiral out of control, the officials said, speaking anonymously to Reuters.