Putin, who will step down after the March 2 presidential elections, set a record of four hours and 40 minutes for answering journalists' questions during his last annual news conference as head of state.
"Our main objectives are domestic development, economic and welfare problems," Putin said, "But we need a friendly international environment."
He rebuffed accusations that Russia's foreign policies were impeding its economic development.
"Our foreign policies do not produce a restraining impact on the development of Russia's economy," Putin said adding that attempts to settle "prickly issues" with other countries were aimed at ensuring Russia equal rights.
Referring to last week's refusal by the OSCE's Office for Democratic Institutions and Human Rights (ODIHR) to monitor Russia's upcoming presidential polls, Putin said earlier that his country would not allow anyone to dictate terms to it, but that it would honor its international commitments in full.
"We will not allow anyone to dictate any terms to us, but we will honor every commitment... This is the fundamental principle of international law," the Russian leader said.
He also denied that Russia was behaving aggressively towards the West.
"There is no need to suspect Russia of aggressiveness. There has never been, and never will be, any aggressiveness," Putin said.
He said it was not Russia who announced the deployment of the third missile defense system, referring to U.S. plans to base a missile shield in Europe.
"But we have to react to this, and we did react by suspending the CFE treaty," the Russian president said.
Russia imposed in December 2007 a unilateral moratorium on the Conventional Forces in Europe treaty on arms reduction, but said it would resume its participation after North Atlantic Treaty Organization countries ratify the document.
The adapted version of the CFE treaty, aimed at regulating the deployment of non-nuclear weapons on the continent, was signed on November 19, 1999, and has so far been ratified only by Russia, Ukraine, Belarus and Kazakhstan.
NATO countries' refusal to ratify the updated version of the Soviet-era CFE, has proved a major stumbling block in Russia-NATO relations.
