Biden: Russian attack on Ukraine 'still very much a possibility'

US President Joe Biden has said that a Russian attack on Ukraine remains "very much a possibility," but that a diplomatic solution to the crisis could yet be reached.

Biden said on Tuesday the United States had "not yet verified" any withdrawal of Russian troops from Ukraine's borders, and that "analysts indicate that they remain very much in a threatening position." 

If Russia invades, he warned, the United States is "ready to go" with punishing sanctions. Nevertheless, Biden said, "we should give the diplomacy every chance to succeed."

Biden made the remarks at the White House hours after Russia announced that some units participating in military exercises near Ukraine's borders would begin returning to their bases. 

READ MORE: Does Russia want war? ‘Of course, not,’ says Putin

READ MORE: Ukraine declares 'day of unity' for February 16 over possible 'invasion'

'You are not our enemy'

Russian President Vladimir Putin earlier on Tuesday said Russia was ready for talks with the United States and NATO on military transparency, missile deployment limits and other security issues. 

Putin said he doesn't want war and would rely on negotiations as he presses his demand for the West to halt Ukraine's bid to join NATO. 

At the same time, he didn't commit to a full pullback of troops, saying Russia's next moves in the standoff will depend on how the situation evolves.

While the overtures soothed global markets that have been on edge amid the worst East-West tensions in decades, Washington and its European allies remained cautious, saying they want to see evidence of a Russian pullback.

Biden too continued to express skepticism about Russia's intentions. 

Biden warned again that if Russia invades Ukraine the US "will rally the world to oppose its aggression."

"To the citizens of Russia: you are not our enemy, and I don’t believe you want a bloody, destructive war against Ukraine," Biden added.

READ MORE: Ukrainian CEOs prepare to fight as businesses suffer from war talk

Blowback on American economy

Biden also acknowledged the likelihood that US and allied sanctions on Russia in retaliation for an invasion of Ukraine would have significant blowback on the American economy, including possible price hikes and disruption to the nation's energy supply. 

"The American people understand that defending democracy and liberty is never without cost," Biden said. 

"I will not pretend this will be painless."

He said the administration was working proactively to try to preempt supply issues by working with energy producers and shippers on contingency plans, and said he would work with Congress on unspecified "additional measures to protect consumers and address the impact of prices at the pump."

READ MORE: Germany urges Russia to de-escalate, withdraw troops around Ukraine