By Alexei Anishchuk and Thomas Grove
MOSCOW/NAANTALI, Finland (Reuters) - President Vladimir Putin confirmed on Tuesday a former U.S. spy agency contractor sought by the United States was in the transit area of a Moscow airport but ruled out handing him over to Washington, dismissing U.S. criticisms as "ravings and rubbish".
In his first public comments since the fugitive flew in on Sunday, he appeared to make light of the affair around Edward Snowden, whose flight from U.S. authorities is becoming an increasing embarrassment for President Barack Obama. Asked by a journalist about the affair, he smiled fleetingly.
"I myself would prefer not to deal with these issues. It's like shearing a piglet: there's a lot of squealing, but there's little wool," he told a news conference in Finland.
His refusal to hand back Snowden risked deepening a rift with the United States that has also sucked in China and threatens relations between countries that may be essential in settling global conflicts including the Syrian war.
Putin said the 30-year-old American was in the transit area of Moscow's Sheremetyevo airport and, not having gone through passport control, was free to leave.
"The sooner he chooses his final destination, the better it would be for us and for himself," Putin said.
Snowden has applied for asylum in Ecuador but Quito has said it is still considering the application and the United States is trying to persuade the governments of countries where he might head to hand him over. His plans remain unclear.
"He has not crossed the state's border, and therefore does not need a visa. And any accusations against Russia (of aiding him) are ravings and rubbish," Putin said in response to a question at a news conference during a visit to Finland.
Washington has gone to great lengths to try to ensure Snowden has nowhere to go to seek refuge. But Putin said Russia had no extradition treaty with the United States and suggested Moscow would expel Snowden only if he were a criminal.
"Thank God, Mr Snowden committed no crimes on the territory of the Russian Federation," Putin said in the garden of a presidential residence, with Finnish President Sauli Niinisto beside him.
Putin said he hoped relations with the United States would not be affected by the affair but his words seemed to rebuff U.S. Secretary of State John Kerry, speaking only hours earlier.
"It is accurate there is not an extradition treaty between Russia and the United states, but there are standards of behaviour between sovereign nations," Kerry said, in Jeddah.
There has been speculation in the Russian media that Snowden may be talking to the FSB and could be involved in a prisoner swap. Putin said Russian security agencies "never worked with... Snowden and are not working with him today".
The U.S. State Department said diplomats and Justice Department officials were talking to Russia, suggesting they sought a deal to secure his return to face espionage charges.
Snowden, charged with disclosing secret U.S. surveillance programmes, left Hong Kong for Moscow on Sunday and the WikiLeaks anti-secrecy group said he was headed for Ecuador.
Journalists camped out at the airport have not spotted him inside, or leaving, the transit area. He has not registered at a hotel in the transit zone, hotel sources say.
A receptionist at the Capsule Hotel "Air Express", a complex of 47 basic rooms furnished predominantly with grey carpets and grey walls, said Snowden had turned up on Sunday, looked at the price list and then left.
U.S. officials admonished Beijing and Moscow on Monday for allowing Snowden to escape their clutches but the United States' partners on the U.N. Security Council, already at odds with Washington over the conflict in Syria, hit back indignantly.
"The United States' criticism of China's central government is baseless. China absolutely cannot accept it," Foreign Ministry spokeswoman Hua Chunying said in Beijing, also dismissing U.S. criticism of Hong Kong, a Chinese territory, for letting Snowden leave.
Putin also went on to praise WikiLeaks founder Julian Assange, who is also a fugitive from U.S. justice, and questioned whether he or Snowden should be treated as criminals.
"Ask yourself: should such people be handed over to be imprisoned or not?" said Putin, who last week was smarting at being isolated over Syria at a summit of the G8 industrial powers and sees Washington as an overzealous global policeman.
Fallout from a protracted wrangle over Snowden could be far-reaching, as Russia, the United States and China hold veto powers at the U.N. Security Council and their broad agreement could be vital to any settlement in Syria.
International mediator Lakhdar Brahimi said on Tuesday he was pessimistic an international conference on Syria could take place in July as hoped and urged Russia and the United States to help contain a conflict which has killed almost 100,000 people.
The Sheremetyevo airport transit area is Russian sovereign territory, but Russia says that in staying there Snowden has not formally entered the country. Going through passport control might implicate Putin in helping a fugitive.
Snowden is travelling on a refugee document of passage provided by Ecuador, WikiLeaks said.
U.S. officials said intelligence agencies were concerned they did not know how much sensitive material Snowden had and that he may have taken more documents than initially estimated which could get into the hands of foreign intelligence.
(This story refiles to adjust translation in paragraph 3) (Additional reporting Gabriela Baczynska and Lidia Kelly in Moscow, Alexandra Valencia in Quito, Mark Felsenthal, Paul Eckert and Mark Hosenball in Washington and Katya Golubkova in Havana, Writing by Elizabeth Piper and Timothy Heritage, editing by Ralph Boulton)