* Putin gives interview to Reuters, other agencies
* President mixes defiance and conciliatory talk
* Sees no return to Cold War, no new Soviet Union (Adds quotes, details, background)
By Paul Ingrassia
ST PETERSBURG, Russia, May 24 (Reuters) - Russian President Vladimir Putin on Saturday dismissed talk of a new Cold War over the crisis in Ukraine and denied trying to rebuild the Soviet Union after reclaiming Crimea.
In an interview with Reuters and other international news agencies in a grandiose palace outside St Petersburg, Putin blamed the violence and political instability in Ukraine on the West and warned that sanctions would rebound on the United States and the European Union.
The crisis has plunged East-West relations to their lowest level since the Cold War ended in 1991.
But making a new pledge to work with whoever is elected president in Ukraine on Sunday, Putin called for dialogue with the West and hoped the European Union and the United States were ready for compromise.
“I would not like to think this is the start of a new Cold War. It is in no one’s interest and I think it will not happen,” said Putin, sitting at a large table with journalists in the Konstantinovsky Palace on the Gulf of Finland near the former imperial capital, the cradle of the 1917 Bolshevik revolution.
Although he has described the Soviet Union’s demise as a geopolitical disaster, the former KGB agent denied trying to revive the Soviet empire after annexing Crimea in March, 60 years after Moscow gifted the Black Sea peninsula to Ukraine.
Plans to form a Russia-led trading bloc with two former Soviet republics, Kazakhstan and Belarus, should also not be seen as evidence that he harbours such ambitions, he said.
“They try to stick this label on us - a label that we are trying to restore an empire, the Soviet Union, make everyone subordinate. This absolutely does not correspond to reality,” he said. “It is a media weapon of war.”
In a long interview after a week in which he visited China to complete a $400-billion gas supply deal and hosted Russia’s answer to the Davos World Economic Forum, Putin mixed defiance with conciliatory talk.
At times he bristled at questions over the sanctions and his responses underlined Russia’s grievance that it has not been treated as an equal partner since the end of the Cold War and the loss of superpower status.
But, as in a speech on Friday to investors at the St Petersburg International Economic Forum, he called for compromise over the crisis in Ukraine and a new start.
“I think that the idea of isolating such a country (as Russia) can only be temporary. It is impossible,” he said.
A day after acknowledging that Russia’s already stuttering economy was being hurt by the sanctions, mainly targeting officials and companies considered close to him, Putin called for better cooperation with Europe.
“We must proceed, not from possible threats, but from the possible benefits in cooperation,” he said.
After a pro-Russian president was toppled in Ukraine in February, Putin declared the right to send in troops if the lives of Russian speakers and compatriots were in danger in the former Soviet republic of 45 million.
Since seizing Crimea, an action which sent Putin’s popularity soaring in Russia, Moscow has massed tens of thousands of troops on the frontier, though it says they have now started withdrawing. An invasion to back an uprising in east Ukraine by armed pro-Russian separatists now looks less likely.
Washington and Brussels have threatened to impose tougher sanctions if Moscow interferes with Sunday’s vote in Ukraine.
“By all means, we will respect the choice of the Ukrainian people and will be working with the authorities formed on the basis of this election,” Putin said, abandoning Russian officials’ sharp criticism of the election in recent weeks.
But he made clear Russia was not about to drop a threat to stop supplying Ukraine with natural gas next month unless Kiev pays off some of its $3.5 billion gas bill and starts paying for future deliveries in advance.
He said Ukraine had no contractual right to demand cuts in the price it pays for its gas supplies in a dispute that has raised concern in Europe that onward supplies to European Union member states could be disrupted.
“We are ready for a constructive dialogue, but it should not be carried out through baseless demands and ultimatums,” Putin said.
Additional reporting by Alexei Anishchuk, Lidia Kelly, Vladimir Soldatkin, Katya Golubkova and Jason Bush, Editing by Timothy Heritage and David Evans