Prime Minister Vladimir Putin on Thursday said he was pleased with the protest wave that shook his 12-year domination of Russia but rejected opposition claims that parliamentary elections were rigged.

In his annual phone-in session, Putin sought to show he was relaxed about the mass protests alleging fraud in parliamentary polls that have posed an unexpected challenge ahead of his planned return to the Kremlin in 2012.

But he also mocked the white ribbon that the protestors have used as their symbol -- saying he thought it was part of an anti-AIDS campaign -- and alleged that some had even been paid by the United States.

"I saw on television mostly young, active people clearly expressing their position. I am pleased to see this," Putin said in his first reaction to the demonstrations over the December 4 polls.

"And if this is the result of the Putin regime, than this is good. I see nothing extraordinary about it."

Tens of thousands of people protested on Saturday in Moscow in a sanctioned protest that was Russia's biggest show of popular discontent since the turbulent 1990s. The rally was peaceful although protests earlier in the week ended in hundreds of arrests.

Putin -- who now faces three tricky months before the March presidential elections -- described the protests as normal but also warned they had to take place within the framework of the law.

"The fact that people are expressing their point of view about the processes occurring in the country, in the economy, in the social sphere, in politics, is an absolutely normal thing, as long as people continue acting within the law.

"I expect them to continue doing so," he added. The opposition is planning a new protest in Moscow on December 24 to call for the invalidation of the election results.

The ruling party United Russia won the parliamentary elections but with less than half the vote, a result which was far weaker than previous years but which the opposition said would have been far worse had the polls been free.

But with the new State Duma lower house of parliament due to meet next week, Putin insisted that the results were realistic and said the opposition's claims of fraud were predictable.

"In my opinion, the result of these elections unquestionably reflects the real political make-up of the country," said Putin.

"As for the fairness or unfairness: the opposition will always say the elections were not fair. Always. This happens everywhere, in all countries."

But in an apparent bid to calm the situation, Putin ordered the installation of web cameras in every Russian polling station.

"I ask the central election commission to install web cameras in all 90,000 polling stations in the country and put the footage on the Internet so the whole country can see," he said.

But Putin also took the opportunity to mock the protesters, saying he thought white ribbons worn as a symbol of their demonstrations against his rule were contraceptives worn as part of an anti-AIDS campaign.

"I decided that it was an anti-AIDS campaign... that they pinned on contraceptives, I beg your pardon, only folding them in a strange way," Putin said.

He also alleged that some of the participants were hired to protest against the government.

"I know that students were paid some money -- well, that's good if they could earn something," he said. Putin last week accused US Secretary of State Hillary Clinton of encouraging the Russian opposition to protest by sending them a signal.

Taking aim at US foreign policy, Putin accused the United States of involvement in the killing of Libyan leader Moamer Kadhafi and launched an extraordinary personal attack on US Senator John McCain.

He said American drones and special forces were involved in the killing of Kadhafi and added that Vietnam veteran McCain -- a regular Kremlin critic -- already has "enough blood of peaceful citizens on his hands".

The carefully stage-managed annual phone-in, which allows Putin to flaunt his charisma and a natural ability to command attention, is designed to boost his image and show he remains in control of Russia.

The audience in the snazzy blue and white studio inside the Gostiny Dvor conference centre featured prominent figures ranging from Mariinsky Theatre chief Valery Gergiev to surgeon Leonid Roshal who lavished praise on Putin.

President Dmitry Medvedev is stepping aside for Putin to return to the Kremlin after just one term in office. One challenger in the elections will be tycoon Mikhail Prokhorov, who announced his candidacy this week and Putin described as "strong and worthy" challenger.

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