Russian President Vladimir Putin has decided against expelling US diplomats in a tit-for-tat move, possibly to keep open options for a better relationship with incoming US President Donald Trump.
"We will not create problems for American diplomats. We will not expel anyone," Mr Putin said in a statement yesterday, calling the "unfriendly" moves by the Obama administration on Thursday a provocation aimed at further undermining bilateral ties.
He said he would watch the policies of the incoming Trump administration, but warned that Moscow reserved the right to hit back.
Russia's Foreign Ministry recommended the expulsion of 35 US diplomats to mirror the same number of Russian diplomats ordered to leave Washington to punish Moscow for alleged cyber-meddling in last month's presidential election.
The United States also hit Russia's military and domestic intelligence agencies with sanctions and closed two Russian compounds that it called "beachside spy nests", the measures coming just three weeks before President Barack Obama steps down from office.
"It is regrettable that the Obama administration, which started out by restoring our ties, is ending its term in an anti-Russia agony. RIP," Russian Prime Minister Dmitry Medvedev said in a tweet.
The US moves came as the Department of Homeland Security and the Federal Bureau of Investigation issued a joint analysis report detailing "significant malicious cyber-enabled activities" by hackers working for Russia's civilian and military intelligence agencies.
"The increasing use of cyber- enabled means to undermine democratic processes at home and abroad, as exemplified by Russia's recent activities, has made clear that a tool explicitly targeting attempts to interfere with elections is... warranted," the White House said earlier in a statement.
Russia already faces sanctions from the US and other Western countries over its annexation in 2014 of the former Ukrainian territory of Crimea.
Mr Obama's executive order landed Mr Trump, who takes power on Jan 20, with a problem.
Russian Foreign Ministry spokesman Maria Zakharova, who lashed out at the Obama administration by calling it "a group of foreign policy losers, bitter and narrow- minded", said the latest sanctions "complicated the urgent tasks for the incoming team in the extreme".
Mr Trump, who has said he wants to forge better relations with Moscow and has been accused by critics of being soft on Mr Putin, could cancel the executive order.
But his apparent warmth towards the Russian President has raised eyebrows even among some Republicans. The sanctions have broad bipartisan support.
Republican senators John McCain and Lindsey Graham, in a joint statement on Thursday night, said Mr Obama's retaliation was "long overdue".
"But ultimately, they are a small price for Russia to pay for its brazen attack on American democracy. We intend to lead the effort in the new Congress to impose stronger sanctions on Russia," the statement added.
If Mr Trump moves quickly to cancel the executive order after taking office, he will risk playing into the hands of critics on both sides of the political divide.
His reaction to Mr Obama's sanctions was cautious.
"It is time for our country to move on to bigger and better things," he said in a brief statement. "Nevertheless, in the interest of our country and its great people, I will meet with leaders of the intelligence community next week in order to be updated on the facts of this situation."
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