Crimea's Moscow-backed leaders declared a 96-percent vote in favour of quitting Ukraine and annexation by Russia in a referendum Western powers said was illegal and will bring immediate sanctions.

As state media in Russia carried a startling reminder of its power to turn the US to "radioactive ash", President Barack Obama spoke to Vladimir Putin, telling the Russian president that he and his European allies were ready to impose "additional costs" on Moscow for violating Ukraine's territory.

The Kremlin and the White House issued statements saying Obama and Putin saw diplomatic options to resolve what is the gravest crisis in East-West relations since the Cold War.

But Obama said Russian forces must first end "incursions" into its ex-Soviet neighbour while Putin renewed his accusation that the new leadership in Kiev, brought to power by an uprising last month against his elected Ukrainian ally, were failing to protect Russian-speakers from violent Ukrainian nationalists.

Moscow defended a military takeover of the majority ethnic Russian Crimea by citing a right to protect "peaceful citizens". Ukraine's interim government has mobilised troops to defend against an invasion of its eastern mainland, where pro-Russian protesters have been involved in deadly clashes in recent days.

With three-quarters of Sunday's votes counted in Crimea, a Black Sea peninsula that is home to 2 million people, 95.7 percent had supported annexation by Russia, chief electoral official Mikhail Malyshev, was quoted as saying by local media.

Turnout was 83 percent, he added - a high figure given that many who opposed the move had said they would boycott the vote.

US and European officials say military action is unlikely over Crimea, which Soviet rulers handed to Ukraine 60 years ago. But the risk of a wider Russian incursion, as Putin probes Western weakness and tries to restore Moscow's influence over its old Soviet empire, leaves Nato calculating how to help Kiev without triggering what some Ukrainians call "World War Three".

On Lenin Square in the centre of the Crimean capital Simferopol, a band struck up even before polls closed as the crowd waved Russian flags. Regional premier Sergei Aksyonov, a businessman nicknamed "Goblin" who took power when Russian forces moved in two weeks ago, thanked Moscow for its support.

The regional assembly is expected to rubber-stamp a plan to transfer allegiance to Russia on Monday before Aksyonov travels to Moscow, although the timing of any final annexation is in doubt. Putin may choose to hold off a formal move as diplomatic bargaining continues over economic and diplomatic sanctions that many EU states fear could hurt them as much as they do Russia.

"Cherish Putin, he is a great, great president!" said Olga Pelikova, 52, as fireworks lit up the night sky and fellow Crimeans said they hoped to share in Russia's oil-fueled wealth after two decades of instability and corruption in Ukraine.

But many ethnic Tatars, Muslims who make up 12 percent of Crimea's population, boycotted the vote, fearful of a revival of the persecution they suffered for centuries under Moscow's rule.

"This is my land. This is the land of my ancestors. Who asked me if I want it or not?" said Shevkaye Assanova, a Tatar in her 40s. "For the rest of my life I will be cursing those who brought these people here. I don't recognise this at all."

A pressing concern for the governments in Kiev and Moscow is the transfer of control of Ukrainian military bases. Many of the bases are surrounded and under control of Russian forces, even though Moscow formally denies it has troops in the territory beyond facilities it leases for its important Black Sea Fleet.

On Sunday, the Ukrainian and Russian militaries agreed on a truce in Crimea until March 21, Ukraine's government said.

Crimean leaders have said Ukrainian troops can serve Russia or have safe passage out of the region. But some leaders in Kiev have said they expect their forces to defend their positions.

SANCTIONS NOW

The White House said in a statement on the call with Putin that Obama "emphasised that Russia's actions were in violation of Ukraine's sovereignty and territorial integrity and that, in coordination with our European partners, we are prepared to impose additional costs on Russia for its actions".

The European Union will raise the stakes on Monday by slapping sanctions on officials. EU diplomats were haggling over a list of people in Crimea and Russia who will be hit with travel bans and asset freezes for actions which "threaten the territorial integrity, sovereignty and independence of Ukraine."

An initial list of 120 to 130 names will be whittled down to "tens or scores" before EU foreign ministers take the final decision in Brussels on Monday, diplomats said. Ministers are also expected to cancel an EU-Russia summit scheduled for June in Sochi, where Putin last month hosted the Winter Olympics. - Reuters