The Kremlin beat a tactical retreat over a regional referendum following days of soaring tension that have left dozens dead and fed fears of a civil war in Ukraine.

Russia's president, Vladimir Putin, said the referendum being staged by pro-Russia separatists in parts of eastern Ukraine on Sunday should be postponed. If the referendum goes ahead, it will provide an argument for the region joining Russia as happened in Crimea in March.

Overt Russian support for the plebiscite could have triggered more substantive EU and US sanctions against Russia. Putin's statement, following talks with the president of Switzerland in Moscow, looked likely to delay the imposition of a harsher round of economic penalties.

While Moscow has also opposed the holding of presidential elections in Ukraine on 25 May – a ballot strongly supported by the west – Putin sounded more conciliatory, saying that the poll could be a step in the right direction.

The Russian leader insisted, however, that a presidential election should be preceded by constitutional changes in Ukraine aimed at federalising the country and handing greater powers to the regions, steps that would favour greater Russian influence over eastern Ukraine after the Kremlin annexed Crimea.

On Wednesday Ukraine's interim prime minister, Arseniy Yatsenyuk, dismissed Putin's call to postpone the referendum as "hot air". Later the Ukrainian foreign ministry on Thursday said it was the "absolute priority" of the government of Ukraine to hold "a full-scale national dialogue with the participation of political forces, regional representatives and the public." But it declared: "Dialogue is impossible and unthinkable with terrorists."

The US cautiously welcomed Putin's remarks but described them as insufficient. State department spokeswoman Jen Psaki said: "We've made clear that we believe the proposed referendum is both illegal and illegitimate. We need to see more from President Putin than simply calling for it to be postponed." She said Russia should use its influence to ensure the 25 May election proceeded peacefully.

Putin said Russian troops had been pulled back from the Ukrainian border to their training grounds and locations for "regular exercises" but did not specify whether those were in areas near Ukraine. However, Nato and the White House said they had seen no indication of a change in the position of Russian military forces.

"We would certainly welcome a meaningful and transparent withdrawal" White House spokesman Josh Earnest said. "To date, there has been no evidence that such a withdrawal has taken place."

It remained unclear whether the pro-Russia gunmen who have taken over public buildings in a number of towns in the Donetsk region would drop their referendum plans. Outside the main headquarters of the separatist movement, an occupied government building in Donetsk, there was confusion at Putin's statement. A group of men guarding the entrance insisted that it was impossible Putin had offered support for the Kiev elections and asked to delay the referendum, and were certain it was a false story dreamed up by nefarious Ukrainian and western media.

"So Russia has abandoned us as well," said Natalia Medvedenko, 58. "Well we will just have to fight the fascists on our own. But I still don't quite believe it."

In rebel-held Slavyansk a member of the militia who gave his name as Rustem described Putin as a coward who was "afraid of losing his money". Loading sandbags into a truck, he said: "Instead of helping Russian people here, he is betraying us. He will pay for this with a revolution in Red Square. Russian people will not stand by and watch this happen."

The Russian government said this week that constitutional changes in Ukraine should be enacted later this year, putting the presidential election off until then.

That strategy is rejected by the west. Senior western officials pushed for the 25 May poll to go ahead and accused Moscow of working assiduously to foment chaos in order to invalidate the election. They described Sunday's secession referendum as a bogus poll that would be seen as illegitimate, while insisting that the national election should go ahead.

The Ukrainians "cannot be bullied out of having their elections by disorder that is deliberately fomented and coordinated from another country – in this case from Russia," the foreign secretary, William Hague, told the BBC after visiting Kiev and before Putin spoke. "They are entitled to have their democratic choice, to choose their own president."

Herman Van Rompuy, the senior EU official who chairs EU summits, delivered the same message. "The immediate goal is to support free and fair presidential elections. We agreed that further steps by Russia to destabilise the situation in Ukraine would lead to additional, far-reaching consequences," he said.

With the tug-of-war between Russia and the west over the fate of Ukraine focused on popular votes, John Kerry, the US secretary of state, described the separatist referendum as contrived and bogus.

"We flatly reject this illegal effort to further divide Ukraine," he said.

The Americans and Europeans are engaged in intensive talks over a third round of sanctions against Russia, targeting key industrial and economic sectors. Deciding to implement the next round of sanctions would mark a major escalation and entail Russian retaliation, hurting weak European economies.

Catherine Ashton, the top EU foreign policy official, was in Washington discussing the options, while the US Treasury undersecretary for terrorism and financial intelligence, David Cohen, toured EU capitals to coordinate possible sanctions moves. "We are moving in a strong and systematic way to maximise the cost on Russia while minimising to the extent possible the spillover on other economies including those here in Europe," he said in Paris. Depending on Putin's moves, however, the wider sanctions regime looked improbable. Hague emphasised the long-term cost to Moscow of its policies in Ukraine.

Meanwhile violence continued to simmer in Mariupol, an industrial port city in Ukraine's south-east. An hour-long gunfight reportedly broke out on the main road approaching the city from Berdyansk after rebels ambushed a bus carrying special forces. "The bus driver was wounded, one of the attackers was killed and another two killed," Ukraine's interior ministry said in a statement.

According to the ministry one of those captured was the self-declared Donetsk People's Republic defence minister Igor Kakidzanov. Ukrainian forces then reportedly "cleaned" the rebel held city administration building before abandoning it less than an hour later and allowing the rebels to retake control.

Elsewhere a prisoner exchange between rebel representatives and the government in Kiev appears to have led to the release of up to three rebel leaders in return for four Ukrainian security services officers beaten and paraded on television after their capture on 27 April. On of the rebels released is Pavel Gubarev, the leader of the self-declared Donetsk republic.