Moscow - President Vladimir Putin revealed Tuesday that Edward Snowden was indeed here but would not be handed over, confirming Russia's willingness to confound the United States but offering few clues to the secret-spiller's mysterious journey.

Snowden, the former National Security Agency contractor charged with exposing clandestine U.S. surveillance programs, had arrived unexpectedly, Putin said, and was sorting out his next move within the transit zone of Sheremetyevo International Airport, just shy of the Russian border.

Since Snowden's arrival here from Hong Kong on Sunday, the United States and Russia have danced around each other like two boxers sparring in the ring, neither seeking a knockout but eager to take a few swings - Russia had no legal grounds to help, Putin insisted. They have a tense relationship that both sides find exasperating but neither wants to destroy.

It appears likely that the dispute over Snowden, which has engendered sharp rhetoric, will fall short of serious confrontation, according to Russia watchers who say neither side wants to permanently jeopardize the ability to talk over the issues that dominate their relationship - Iran, Afghanistan and even Syria.

The dynamics of the relationship stood in sharp relief as Putin discussed Snowden with reporters at a news conference in Finland. First he said that Snowden was a free man who was welcome to go on his way, ignoring the ardent U.S. desire for his return. But he also suggested that was hardly a reason to cause a dispute among friends.

"I hope this won't affect the businesslike nature of our relations with the United States," Putin said. "I hope our partners will understand this."

Secretary of State John Kerry has said repeatedly over the past few days that Russia was defying international convention by allowing an American fugitive to remain unhindered in a transit zone at the airport.

"There are standards of behavior between sovereign nations," said Kerry, who is traveling in Saudi Arabia. "There is common law. There is respect for rule of law."

"We are not looking for a confrontation," he said. "We are not ordering anything. We are simply requesting."

When Putin says the Snowden affair won't affect relations, he probably believes it, said Angela Stent, director of the Center for Eurasian, Russian and East European Studies at Georgetown University. Stent, who has a book on U.S.-Russian relations coming out soon, said Russia tends to compartmentalize its dealings with the United States, which tends to see linkages between issues.

"From Washington's point of view, we want to be able to work with the Russians on Syria, if this conference ever comes to pass," as well as Afghanistan, Iran and other issues, said Stent, who is on a visit to Russia. "We don't want other extraneous issues to intrude."

Of course, Russia is trying to extract maximum advantage and mount some of the "moral high ground" it often accuses the United States of considering its divine right, said Fiona Hill of the Brookings Institution. Putin, who detests the U.S. support for human rights groups in his country and accuses it of financing opposition, alluded to Snowden as an activist who hardly deserved jail.

"Ask yourself: Should such people be extradited to be jailed or not?" Putin said. "In any case, I would prefer not to deal with such issues, because this is just the same as shaving a piglet - too much noise but too little hair."

Russia says that it can't turn Snowden over, because he is in the airport transit zone, meaning he has not officially crossed the border.

The transit zone at Sheremetyevo, a melange of VIP waiting rooms, short-term hotel rooms, hard benches for people without proper papers awaiting deportation and the odd Federal Security Service interrogation suite, has taken on nearly mythical proportions as the world imagines Snowden there, detoured on his way to possible asylum in Ecuador. Russian officials have suggested that the transit zone is outside their control, but passengers there are under careful scrutiny and subject to arrest as they would be anywhere else.

That, Hill said, enables Russia to portray itself as a bystander. (Courts, including the European Court of Human Rights, say such transit zones do not lie outside a nation's laws.)

"As a transit passenger," Putin said Tuesday, "he has the right to buy a ticket and fly wherever he wants."

Putin said Russia had no grounds to extradite Snowden, because the two countries have no extradition treaty-a jab at the United States, which has resisted Russia's requests for one.

According to Glenn Greenwald, the Guardian newspaper columnist who has written a series of stories based on material provided by the former NSA contractor, Snowden has created encrypted versions of the classified files he obtained and given them to a number of associates. Those people would be given instructions on how to access the files under an unspecified set of circumstances.

Greenwald told the Daily Beast that Snowden "took extreme precautions to make sure many different people around the world have these archives to ensure the stories will inevitably be published."

James Collins, a former U.S. ambassador to Russia who is now at the Carnegie Endowment, said the Snowden contretemps, while harmful, is unlikely to shape the relationship.

"These things come up, and they get more or less gravity depending on how they're played," but they rarely have long-lasting consequences, Collins said. He suspected the Russians were eager to see the end of the episode.

"They find themselves now where the Chinese were a few days ago and are trying to figure out just how to manage this," he said.

China and Hong Kong also asserted strict legality in allowing Snowden to leave Hong Kong on Sunday, despite U.S. assertions to the contrary.

"The accusations against the Chinese government are groundless," said Ministry of Foreign Affairs spokesperson Hua Chunying. "We hope the United States can work with China 1/8to 3/8 . . . strengthen dialogue and cooperation . . . and continuously promote new development of U.S.-China relations."

Amid all the rhetoric, Collins said, it was apparent Snowden has caused "serious damage" by alerting the "bad guys" of the world that they need to be more careful. "And that's not good for the Russians or anyone else who's a victim of terrorist activity."

For now, Russia and Putin were relishing a round they clearly thought they had won.

"Thank God, Mr. Snowden has not committed any crimes on the Russian Federation territory," Putin said Tuesday.

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Karen DeYoung in Saudi Arabia, Jia Lynn Yang in Hong Kong and Anthony Faiola in London contributed to this report.

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