Russia's ambassador to the United Nations has told an emergency meeting of the Security Council that Moscow "does not want war" with Ukraine.
Vitaly Churkin was responding to a direct question from Ukraine's interim PM Arseniy Yatsenyuk.
But Mr Churkin gave an impassioned defence of Crimea's right to hold a referendum on whether to join Russia.
In the east Ukraine city of Donetsk, one person died in violence between rival protesters, said officials.
Several people were also injured as hundreds of pro-Russia protesters clashed with a similar-sized group of Kiev supporters in the city's Lenin Square, said local health authorities.
It is the worst violence since the fall of Ukraine President Viktor Yanukovych on 22 February.
Tensions are high as diplomatic efforts intensify ahead of Sunday's controversial referendum in the mainly ethnic Russian autonomous region of Crimea.
US Secretary of State John Kerry is due to meet Russian Foreign Minister Sergei Lavrov in London on Friday.
Mr Yatsenyuk told the Security Council that his country was a victim of Russian aggression, and held up a copy of the UN Charter to make his point that Moscow was violating it and several other international treaties.
But he said he still believed "we have a chance to resolve this conflict in a peaceful manner" and urged Moscow to meet for direct talks.
Addressing Mr Churkin directly, he said in Russian that Kiev was "looking for an answer to the question, whether Russians want war" with a country with whom it has "for decades had warm and friendly relations".
"I'm convinced that Russians do not want war," he said. "I hope that the Russian government and the Russian president will heed the wishes of their people and that we return to dialogue and solve this conflict."
In response, Mr Churkin said: "Russia does not want war and nor do the Russians, and I'm convinced that Ukrainians don't want this either.
"Furthermore, we do not... interpret the situation in such terms. We don't want any further exacerbation of the situation."
Mr Churkin did not respond to Mr Yatsenyuk's request for talks, and claimed it was Kiev that was "splitting its country into two parts" not Moscow.
The referendum in Crimea, he said, had come about because of a "legal vacuum" in the country, and questioned why Crimeans should not be "afforded the opportunity" to decide on their future.
Earlier on Wednesday, Russia's defence ministry confirmed it had begun military exercises not far from the Ukrainian border.
The exercises, involving more than 8,000 troops and large artillery units such as rocket launchers and anti-tank weapons, were taking place in the regions of Rostov, Belgorod and Kursk until the end of March, the ministry said.
In a sign the tension may be spreading, Belarus - a Russian ally - confirmed Moscow had deployed, at its request, extra fighter jets and military transport aircraft after Nato boosted its forces in the neighbouring Baltic countries.
Mr Kerry, German Chancellor Angela Merkel and UK Foreign Secretary William Hague again warned of tough new sanctions if Russia did not de-escalate the situation in Crimea.
EU foreign ministers are expected to consider sanctions such as an arms embargo and asset freezes when they meet in Brussels on Monday.
In what it called a "positive development", the Organisation for Security and Co-operation in Europe (OSCE) said Russia had now given its support to a possible long-term monitoring mission in Ukraine.
Such a mission has widespread support among Western nations, but the BBC's Bethany Bell in Vienna says no final agreement has been reached and details are still being worked out.
Both the authorities in Kiev and its Western allies say they will not recognise Sunday's referendum, which they say violates Ukraine's constitution and was hastily arranged with suspected Russian involvement.