Putin said the threat of sanctions is unneeded at this point because it could scare the Iranians.
He told reporters in China on Wednesday that it's necessary to continue talks and search for a compromise. He said further measures should only be discussed if Iran fails to heed international demands in talks with global powers about its nuclear activities.
He said there is no contradiction between his statement on the issue and those of President Dmitry Medvedev, who said that sanctions can sometimes be unavoidable.
Putin spoke as U.S. Secretary of State Hillary Clinton was visiting Russia.