President Dmitry Medvedev warned the West on Monday that any sanctions imposed on Russia over the war in Georgia would backfire.
Russia will not change its course despite pressure from the West, Medvedev said.
"It's senseless to pressure Russia with sanctions," Medvedev said at a meeting with Russian business leaders. "They can shut a couple of sources of (revenue) to a banana republic and make its situation dramatic. It won't work like that here."
Without mentioning any specific nation, Medvedev warned that attempts to punish Russia would also hurt the West.
"Sanctions is a weapon that will backfire," he said. "If attempts are made to introduce sanctions, damages will be symmetrical."
After Russia's war with Georgia last month, some diplomats and politicians in the West called for expelling Russia from the Group of Eight leading industrialized nations and blocking its bid to join the World Trade Organization. No sanctions have been imposed so far.
Medvedev said Russia would like to join the World Trade Organization but would not be pressured into concessions.
"WTO isn't a carrot; it entails a lot of difficult obligations," he said. "And if we do it, let us do it in a normal way without them trying to scare us."
The president also said Russia would not respond to international tension by becoming isolationist.
"We don't need an isolation or an arms race, it's a road to nowhere," he said.
Any manifestations of Ukraine's military aggression after the announcement of the results of referendums should be regarded as acts of open aggression against the civilian population of Russia