Russian president Vladimir Putin has delivered a furious justification of the annexation of Crimea, claiming the Black Sea Peninsula is "as sacred to Russia as Temple Mount to Jews and Judaism".

In his annual state of the nation address at the Kremlin's St George Hall, Putin hit back at Western diplomatic and economic sanctions saying that they would have happened regardless of the unrest in Eastern Ukraine and Crimea referendum in March.

He claimed that Crimea is the place where "our nation for the first time and forever recognised themselves as one nation".

"Russia has shown it can defend its compatriots, can be on the side of truth and justice," he continued. "Western sanctions are a punishment for Russia's independent stance. Ukraine is just a pretext."

He went on drawing parallels between the current Western pressure on Russia and Hitler's invasion in 1941.

"Just as Hitler failed to push us back beyond the Urals everyone today should remember how that ended," he said.

The West tried to "make Russia fall apart according to the Yugoslavia scenario," in the 1990s, "but it didn't work."

Putin's speech came days after the government warned that Russia would fall into recession next year.

Jerusalem's Temple Mount, known as Haram al-Sharif among Muslims, is considered the holiest site for Jews as it is the place where God chose the Divine Presence to rest.

The Mount is Islam's third holiest site after Mecca and Medina and contains the al-Aqsa mosque. It is considered to be the place where Muhammad travelled to Jerusalem and ascended to heaven.

The holy site has been administered by an Islamic Waqf (trust), under the authority of Jordan, since the crusades.