"They intend to translate the local conflict into a global confrontation, we understand it this way and will react accordingly," Putin told lawmakers.
"They want to make the people suffer... but their calculation did not materialise. The Russian economy and the management turned out to be much stronger than they thought," Putin told lawmakers in a speech.
He said that Russia wanted to solve the conflict in Ukraine peacefully but that Western countries had prepared a "different scenario" behind its back.
"We were doing everything possible to solve this problem peacefully, negotiating a peaceful way out of this difficult conflict, but behind our backs a very different scenario was being prepared," Putin told lawmakers from Russia's parliament.
He also vowed to "systematically" press on with Moscow's offensive in Ukraine, as he gave his state of the nation address.
"Step by step, we will carefully and systematically solve the aims that face us," Putin said ahead of the first anniversary of the military intervention.
Putin added that Russia would never yield to Western attempts to divide its society, using a major speech before the country's two houses of parliament to say the majority of Russians support his military campaign in Ukraine.
He said the West was supporting "traitors" who opposed Russia's actions, and thanked Russians for their "courage and resolution" in supporting what Moscow calls a "special military operation" in Ukraine, accusing the West of wanting "to be done with" Russia.
"Western elites are not hiding their goal - to inflict a strategic defeat on Russia. It means to be done with us once and for all," Putin said ahead of the first anniversary of the military intervention.
Putin said the more long-range weapons systems supplied to Ukraine, the further Moscow will push the threat away from Russian borders.
Putin added that he understood how difficult it was for relatives of Russian soldiers who had died fighting in Ukraine, and said he would provide them "targeted support" with a new special fund.
"We all understand, I understand how unbearably hard it is now for the wives, sons, daughters of fallen soldiers, their parents, who raised worthy defenders of the Fatherland."
Friday will mark one year since Russia officially launched its full-scale war against Ukraine.
Putin's appearance was his 18th State of the Nation address to date. The previous one was almost two years ago and took place in April 2021. There was none last year, which Putin had explained due to a very high "dynamics of events."
