(Adds China, Japan reaction, Russian parliament to act on Crimea quickly)
* U.S., EU ready sanctions on Monday to defend Ukraine
* Putin says Kiev failing to protect Russian speakers
* Ukraine military mobilising, fearing invasion in east (Adds China, Japan reaction, Russian parliament to act on Crimea quickly)
By Mike Collett-White and Alastair Macdonald
SIMFEROPOL/KIEV, March 17 (Reuters) - Crimea's Moscow-backed leaders declared a 96-percent vote in favour of quitting Ukraine and annexation by Russia in a referendum Western powers said was illegal and will bring immediate sanctions.
As state media in Russia carried a startling reminder of its power to turn the United States to "radioactive ash", President Barack Obama spoke to Vladimir Putin, telling the Russian president that he and his European allies were ready to impose "additional costs" on Moscow for violating Ukraine's territory.
The Kremlin and the White House issued statements saying Obama and Putin saw diplomatic options to resolve what is the gravest crisis in East-West relations since the Cold War.
But Obama said Russian forces must first end "incursions" into its ex-Soviet neighbour while Putin renewed his accusation that the new leadership in Kiev, brought to power by an uprising last month against his elected Ukrainian ally, were failing to protect Russian-speakers from violent Ukrainian nationalists.
Moscow defended a military takeover of the majority ethnic Russian Crimea by citing a right to protect "peaceful citizens". Ukraine's interim government has mobilised troops to defend against an invasion of its eastern mainland, where pro-Russian protesters have been involved in deadly clashes in recent days.
With three-quarters of Sunday's votes counted in Crimea, a Black Sea peninsula that is home to 2 million people, 95.7 percent had supported annexation by Russia, chief electoral official Mikhail Malyshev, was quoted as saying by local media.
Turnout was 83 percent, he added - a high figure given that many who opposed the move had said they would boycott the vote.
Russia's lower house of parliament will pass legislation allowing Crimea to join Russia "in the very near future", news agency Interfax cited its deputy speaker as saying on Monday.
"Results of the referendum in Crimea clearly showed that residents of Crimea see their future only as part of Russia," Sergei Neverov was quoted as saying.
Japan on Monday echoed Western nations in rejecting the referendum and called on Russia not to annex Crimea.
U.S. and European officials say military action is unlikely over Crimea, which Soviet rulers handed to Ukraine 60 years ago. But the risk of a wider Russian incursion, as Putin probes Western weakness and tries to restore Moscow's influence over its old Soviet empire, leaves NATO calculating how to help Kiev without triggering what some Ukrainians call "World War Three".
"We hope all parties can calmly maintain restraint to prevent the situation from further escalating and worsening. Political resolution and dialogue is the only way out," Chinese Vice Foreign Minister Li Baodong told reporters on Monday, ahead of a visit to Europe by President Xi Jinping later this month.
China avoided making a comment on the Crimea referendum and has said it does not back sanctions on Moscow - a close diplomatic ally and key economic partner.
Highlighting the stakes, journalist Dmitry Kiselyov, who is close to the Kremlin, stood before an image of a mushroom cloud on his weekly TV show to issue a stark warning. He said: "Russia is the only country in the world that is realistically capable of turning the United States into radioactive ash."
On Lenin Square in the centre of the Crimean capital Simferopol, a band struck up even before polls closed as the crowd waved Russian flags. Regional premier Sergei Aksyonov, a businessman nicknamed "Goblin" who took power when Russian forces moved in two weeks ago, thanked Moscow for its support.
The regional assembly is expected to rubber-stamp a plan to transfer allegiance to Russia on Monday before Aksyonov travels to Moscow, although the timing of any final annexation is in doubt. Putin may choose to hold off a formal move as diplomatic bargaining continues over economic and diplomatic sanctions that many EU states fear could hurt them as much as they do Russia.
"Cherish Putin, he is a great, great president!" said Olga Pelikova, 52, as fireworks lit up the night sky and fellow Crimeans said they hoped to share in Russia's oil-fuelled wealth after two decades of instability and corruption in Ukraine.
But many ethnic Tatars, Muslims who make up 12 percent of Crimea's population, boycotted the vote, fearful of a revival of the persecution they suffered for centuries under Moscow's rule.
"This is my land. This is the land of my ancestors. Who asked me if I want it or not?" said Shevkaye Assanova, a Tatar in her 40s. "For the rest of my life I will be cursing those who brought these people here. I don't recognise this at all."
A pressing concern for the governments in Kiev and Moscow is the transfer of control of Ukrainian military bases. Many of the bases are surrounded and under control by Russian forces, even though Moscow formally denies it has troops in the territory beyond facilities it leases for its important Black Sea Fleet.
On Sunday, the Ukrainian and Russian militaries agreed on a truce in Crimea until March 21, Ukraine's government said.
Crimean leaders have said Ukrainian troops can serve Russia or have safe passage out of the region. But some leaders in Kiev have said they expect their forces to defend their positions.
The White House said in a statement on the call with Putin that Obama "emphasised that Russia's actions were in violation of Ukraine's sovereignty and territorial integrity and that, in coordination with our European partners, we are prepared to impose additional costs on Russia for its actions".
The European Union will raise the stakes on Monday by slapping sanctions on officials. EU diplomats were haggling over a list of people in Crimea and Russia who will be hit with travel bans and asset freezes for actions which "threaten the territorial integrity, sovereignty and independence of Ukraine".
An initial list of 120 to 130 names will be whittled down to "tens or scores" before EU foreign ministers take the final decision in Brussels on Monday, diplomats said. Ministers are also expected to cancel an EU-Russia summit scheduled for June in Sochi, where Putin last month hosted the Winter Olympics.
The EU is working to revive a trade and aid deal with Ukraine which ousted president Viktor Yanukovich rejected in November in favour of cash from Moscow, triggering protests that led to bloodshed in Kiev and his flight to Russia last month.
The risk of Europe becoming locked in a damaging spiral of economic retaliation with Moscow, from which it buys much of its energy, depended on Russia, Dutch Foreign Minister Frans Timmermans said ahead of the EU meeting in Brussels: "I would do anything possible to avoid sanctions, because I believe everybody will suffer if we get into sanctions," he said.
The U.S. administration is also preparing to identify Russians to punish with visa bans and asset freezes that Obama authorised this month. It, too, is likely to act on Monday.
The Kremlin statement again highlighted concerns, largely dismissed by Kiev and its Western allies, that Russian-speakers who make up a sizeable minority of Ukraine's 46 million people were facing violence and intimidation since Yanukovich fell.
"Vladimir Vladimirovich Putin drew attention to the inability and unwillingness of the present authorities in Kiev to curb rampant violence by ultra-nationalist and radical groups that destabilise the situation and terrorise civilians, including the Russian-speaking population," it said.
Putin suggested European security monitors should be sent to all parts of Ukraine because of the violence, it said.
There were pro-Russian rallies in several Ukrainian cities on Sunday, including one in Kharkiv where protesters burned books at a Ukrainian cultural centre where two pro-Russian activists were shot dead on Friday in a fight with members of Right Sector, a nationalist group that emerged during battles with riot police amidst the pro-European protests in Kiev.
In Donetsk, heart of the industrial east where a Ukrainian nationalist was killed in a clash last week, some welcomed the outcome in Crimea and hoped they too might vote to join Russia.
"This is a total victory. A 100 percent win," said one man who gave his name as Roman. "We here in Donetsk support Crimea. We don't support the Kiev authorities that are ruling today."
In Kiev and the Ukrainian-speaking west of the country the mood was sombre. "This isn't a referendum - it's a show for the Russians to legitimise taking over," said Kyrylo Sergeev in the capital. Another man in Kiev, Vasyl Olinyk, said: "This could be war, not between Ukraine and Russia but maybe World War Three."
As Ukrainian television channels played patriotic songs over images of tanks rolling in to reinforce the eastern border, where the president says Russia has massed troops ready to invade, the head of the national security council said a Moscow plot, codenamed "Russian Spring", to foment violence and justify invasion was failing to garner significant support.
"The plan has failed," Andriy Paruby said. "Despite all the Kremlin's technical powers, we have managed to keep control."
The Interior Ministry, possibly responding to reported threats by nationalist militants to attack pipelines carrying Russian gas exports to the EU across Ukraine, said its forces had taken control of the country's vital pipeline network.
A Western official briefed on security discussions suggested NATO governments were taking the risk of invasion seriously.
"Putin would be mad to invade Ukraine," he said, forecasting a quick victory over Ukraine's armed forces being followed by a long insurgency and civil war. "He is much better playing it long, fomenting rebellion among the ethnic Russians and waiting until the very weak Ukrainian government collapses.
"However ... Putin may decide to go for the jugular ... He has the means and he may decide to exploit events as they unfold to achieve his long-term strategic end: re-establishment of Russian power in its 'near abroad'." (Additional reporting by Aleksandar Vasovic and Andrew Osborn in Simferopol, Ron Popeski, Richard Balmforth and Natalia Zinets in Kiev, Lina Kushch in Donetsk, Roberta Rampton and Matt Spetalnick in Washington, Adrian Croft and Jan Strupczewski in Brussels and Lidia Kelly and Timothy Heritage in Moscow; Writing by Alastair Macdonald; Editing by Catherine Evans)
Our Standards: The Thomson Reuters Trust Principles.