By Guy Faulconbridge

MOSCOW (Reuters) - President Vladimir Putin on Tuesday vowed to continue with Russia's year-long war in Ukraine and accused the U.S.-led NATO alliance of fanning the flames of the conflict in the mistaken belief that it could defeat Moscow in a global confrontation.

Flanked by four Russian tricolour flags, Putin told Russia's political and military elite that Russia would "carefully and consistently resolve the tasks facing us."

Putin said Russia had done everything it could to avoid war, but that Western-backed Ukraine had been planning to attack Russian-controlled Crimea, annexed by Russia in 2014.

The West, Putin said, had let the genie out of the bottle in a host of regions of across the world by sowing chaos and war.

"The people of Ukraine have become the hostage of the Kyiv regime and its Western overlords, who have effectively occupied this country in the political, military and economic sense," Putin said.

"They intend to translate the local conflict into a global confrontation, we understand it this way and will react accordingly," Putin said.

Defeating Russia, he said, was impossible. The 70-year old Kremlin chief said Russia would never yield to Western attempts to divide its society, adding that a majority of Russians supported the war.

When he spoke about the annexation of four Ukrainian territories last year, he got a standing ovation at the Gostiny Dvor exhibition centre just a few steps from the Kremlin.

He asked the audience, which included lawmakers, soldiers, spy chiefs and state company bosses, to stand to remember those who had lost their lives in the war. He promised a special fund for the families of those killed in the war.

The Ukraine conflict is by far the biggest bet by a Kremlin chief since at least the 1991 fall of the Soviet Union - and a gamble Western leaders such as U.S. President Joe Biden say he must lose.

Russian forces have suffered three major battlefield reversals since the war began but still control around one fifth of Ukraine.

Tens of thousands of men have been killed, and Putin, 70, now says Russia is locked in an existential battle with an arrogant West which he says wants to carve up Russia and steal its vast natural resources.

The West and Ukraine reject that narrative, and say NATO expansion eastwards is no justification for what they say is an imperial-style land grab doomed to failure.