Putin told a joint session of Russia's Parliament that the nearly 97% of Crimean residents who voted to join Russia over the weekend was "an extremely convincing figure."
"In our hearts, we know Crimea has always been an inalienable part of Russia," he said.
Ukrainian Prime Minister Arseniy Yatsenyuk called it "a robbery on an international scale," one that Kiev will never accept.
"One country has come and temporarily stolen part of of the territory of an independent country," he said.
"It will be difficult to find a quick resolution to this problem, but Russia is now isolated by the whole international community."
And after a member of its military was killed, another wounded and more captured when masked gunmen seized their base near the Crimean regional capital, Simferopol, Ukraine's defense ministry authorized its forces to open fire.
Yatsenyuk warned that the crisis was shifting "from political to the military form, and the blame is on the Russian military."
Crimea, which has an ethnic Russian majority, has long been a semiautonomous region within Ukraine.
It has had its own Parliament, but the Ukrainian government had veto power over its actions.
After the revolt that forced pro-Russian President Viktor Yanukovych from office in February, Russian troops poured into the Crimean Peninsula, effectively cutting it off in support of a pro-Russian government that took power in Simferopol.
Putin said Tuesday that Russia had to act as Ukraine's new government, backed by the United States and European powers, prepared "to seize the state through terror and murders."
"The main executors of this were nationalists, Russia-phobes and anti-Semites," he said.
"Those people define what is happening today in Ukraine."
But international observers have said Moscow saw its chance to annex a strategic territory, one that was transferred to Ukraine in the Soviet era and which still hosts the home port of Russia's Black Sea Fleet.
Ukraine's interim President, Oleksandr Turchynov, told reporters that Putin is "mimicking the fascists of the last century" by annexing Crimea.
"The political leadership of Russia will have to answer before the whole world for crimes they are committing today in our country," Turchynov said.
Cameron: Annexation sends 'a chilling message'
Putin declared Tuesday that "We have not used our armed forces in Crimea," despite what has been stated by international observers and the government of Kiev.
He said the 22,000 Russian troops in Crimea did not enter during the current crisis, but "were already there," in accordance with previous international negotiations.
Russian forces were allowed in Crimea under a treaty that allowed the Black Sea Fleet to be based there, but the movements of its forces within Crimea are supposed to be agreed upon with Kiev.
Putin praised those forces for avoiding bloodshed, but the tensions appear to have boiled over into violence Tuesday.
Masked gunmen killed a member of Ukraine's military, wounded another and arrested the remaining staff of Ukraine's military topographic and navigation directorate at Simferopol, Defense Ministry spokesman Vladislav Seleznyov told CNN.
After that, the Defense Ministry authorized its forces in Crimea to use weapons "to protect and preserve the life of Ukrainian soldiers," according to a statement posted on its website.
Petro Poroshenko, a Ukrainian member of Parliament and former foreign minister, said Tuesday that his country stands at "the beginning of a very dangerous conflict, and we should do our best to stop this process."
"Several weeks ago, we had a guarantee that nothing [would] happen with the Crimea. Several weeks ago we had [a situation] that there is not any military presence on Ukrainian territory, including the Crimea," he told CNN's "Amanpour " program.
Now, he said, "I strongly believe that this is not only Ukrainian territory is now threatened."
"Now under attack can be any country in the European Union, including other parts of Ukraine," said Poroshenko, a billionaire and leading potential candidate for president.
"That's why we should think that it can never happen again."
U.S. and EU officials imposed sanctions on more than two dozen Russian and Crimean officials Monday and have urged Russia to avoid escalating the crisis, but Moscow has ignored those calls.
Tuesday's annexation brought a new round of condemnation from the West, with British Prime Minister David Cameron saying it sends "a chilling message across the continent of Europe."
"It is completely unacceptable for Russia to use force to change borders, on the basis of a sham referendum held at the barrel of a Russian gun," Cameron said in a statement issued by Downing Street.
"President Putin should be in no doubt that Russia will face more serious consequences, and I will push European leaders to agree further EU measures when we meet on Thursday."
Russia faces 'more than just sanctions,' Biden says
The G7 group of industrialized nations had already suspended preparations for a planned G8 summit in the Russian city of Sochi.
Now, U.S. President Barack Obama has invited his counterparts from the other G7 countries and the European Union to a meeting of next week on the margins of a nuclear security summit in The Hague, U.S. National Security Council spokeswoman Caitlin Hayden said.
The planned meeting comes amid speculation that Russia will get kicked out of the G8 -- which comprises the G7 countries plus Russia -- because of its actions in Crimea.
In Washington, U.S. Secretary of State John Kerry criticized "this rise of a kind of nationalism that is exercised unilaterally, to the exclusion of the international legal process."
"That's what we have worked hard to avoid ever since World War II," Kerry said.
He acknowledged that Russia has interests in Crimea and "an enormous historical connection to Ukraine," but said he was "really struck and somewhat surprised and even disappointed" by Putin's case for annexing the territory.
"With all due respect, it just didn't (jibe) with reality or what's happening on the ground," Kerry said.
"The President may have his version of history, but I believe that he and Russia, for what they have done, are on the wrong side of history."
German Chancellor Angela Merkel has said the "so-called referendum" and the acceptance of Crimea to the Russian Federation "goes against international law," while French Foreign Minister Laurent Fabius and a French delegation have postponed a planned visit to Moscow because of the Ukrainian situation, the Russian Foreign Ministry said.
And U.S. Vice President Joe Biden, dispatched to reassure NATO allies in Eastern Europe, said Russia faces "more than just sanctions" unless it abandons its "land grab" in Crimea.
"We're talking about Russia putting itself on a path that undermines long-term confidence and creates obstacles for its full participation in the global economy," Biden said after talks in Poland's capital, Warsaw.
"That path that they've placed themselves on does nothing to help the next generation of Russians compete and succeed in a world that will be led by the most dynamic and open economies."
Condemnation abroad, cheers at home
But lawmakers in Moscow met Putin's address with regular and enthusiastic applause.
The Russian leader accused the West of "double standards" and cynicism in its response to the Crimean crisis, citing Kosovo -- which split from Russia's historical ally Serbia over fierce objections from Belgrade -- as a precedent.
"It's absolutely in favor of their own interests -- black today, white tomorrow," he said.
Russia's Parliament is expected to vote on ratifying Crimea's accession to the Russian Federation by the end of the week.
The speaker of Russia's upper house of Parliament, Valentina Matvineko, told state-run Russia-24 TV that the process of adding a new member to the Russian Federation "can be done rather promptly."
And hours after the annexation announcement, Putin appeared at a huge celebration on Red Square organized by his supporters -- a sign of his widespread popularity at home.
An opinion poll by the Moscow-based Levada Center puts his approval rating at 72% -- the highest in more than three years, and the second-highest point of his presidency.
The highest point came in 2008, during Russia's conflict with Georgia, another former Soviet republic.
"Putin in many senses, on many levels, crystallizes the Russian national consciousness," biographer Alexander Korobko told CNN.
"For the past 100 years perhaps, we have never had a leader who would appeal to the Russian soul ... as much as Putin."
Most Russians and Crimeans feel Crimea "is coming back home," and a country that can produce "pretty much anything" has little fear of sanctions, he said.
"It is absolutely not in the U.S. interest to impose sanctions on Russia, because who will take American astronauts to space if not us Russians?" Korobko asked.
Source: CNN International