Flanked on Tuesday by four Russian tricolour flags either side, Putin told Russia's political and military elite that Russia would "carefully and consistently resolve the tasks facing us" in Ukraine.
Besides the promise to continue the war and warnings to the West of a global confrontation, Putin also sought to justify the war, saying it had been forced on Russia and that he understood the pain of the families of those who had fallen in battle.
"The people of Ukraine have become the hostage of the Kyiv regime and its Western overlords, who have effectively occupied this country in the political, military and economic sense," Putin said.
"They intend to transform a local conflict into a phase of global confrontation. This is exactly how we understand it all and we will react accordingly, because in this case we are talking about the existence of our country."
Defeating Russia, he said, was impossible. The 70-year-old Kremlin chief said Russia would never yield to Western attempts to divide its society, adding that a majority of Russians supported the war.
When he spoke about the annexation of four Ukrainian territories last year, he got a standing ovation at the Gostiny Dvor exhibition centre just a few steps from the Kremlin.
He asked the audience, which included lawmakers, soldiers, spy chiefs and state company bosses, to stand to remember those who had lost their lives in the war. He promised a special fund for the families of the victims.
The Ukraine conflict is by far the biggest bet by a Kremlin chief since at least the 1991 fall of the Soviet Union - and a gamble Western leaders such as US President Joe Biden say he must lose.
Russian forces have suffered three major battlefield reversals since the war began but still control around one fifth of Ukraine.
Tens of thousands of men have been killed, and Putin now says Russia is locked in an existential battle with an arrogant West which he says wants to carve up Russia and steal its vast natural resources.
The West and Ukraine reject that narrative, and say NATO expansion eastwards is no justification for what they say is an imperial-style land grab doomed to failure.
Putin, who was handed the presidency on the last day of 1999 by Boris Yeltsin, said the West had failed to destroy the Russian economy with the severest sanctions in modern history.
"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 said.
Russia's $2.1 trillion ($A3 trillion) economy is forecast by the International Monetary Fund to grow 0.3 per cent this year, far below China and India's growth rates but a much better result than was forecast when the war began.
Russia since the 1991 fall of the Soviet Union, Putin said, had been oriented on the West, quipping about how no ordinary Russians shed tears over the loss of yachts and property in the West by rich Russians.
Russia was turning to major Asian powers and Putin called on businesses to invest in the Russian economy.
