U.S. President Joe Biden and Russian President Vladimir Putin exchanged warnings about Ukraine on Thursday  but were optimistic that diplomatic talks in January could ease rising tensions. In a 50-minute call, their second conversation this month, Biden said he had to see Russia downsize its military near Ukraine, while Putin said sanctions threatened by Washington and its allies could lead to a break in relations. "President Joe Biden reiterated that substantial progress in these dialogues can  only be achieved in an environment of de-escalation rather than escalation," said White House press secretary Jen Psaki. Kremlin adviser Yuri Ushakov said the call created "a good background" for future talks. The exchanges of heads of state and government laid the groundwork for lower-level engagement between  countries, including a security meeting between the United States and Russia in January 9-10, followed by a Russia-NATO meeting on January 12 and a wider conference that will be attended by Moscow, Washington and other European countries, scheduled for January 13th. Despite talks about diplomacy, officials on both sides described the tone of the call  as "serious". And none of the countries detailed any significant progress towards a solution or the outline of an agreement. In Kiev, leaders worry about the 60,000 to 90,000 Russian soldiers who have gathered in the north, east and south. Washington wasn't convinced by a report over the weekend that Russia would withdraw about 10,000 soldiers, and officials said they saw little evidence of a reduction. Airspace for the first time earlier this week, although various types of surveillance aircraft are common in the area. For his part, Biden reiterated his threat of unprecedented sanctions if Russia chooses to invade Ukraine. "Joe Biden has taken two avenues," including diplomacy and deterrence, including "serious costs and consequences," said a senior civil servant. “Both leaders admitted that there are likely  areas where we could make significant progress and areas where agreement may not be possible, and that  upcoming talks would define the outline of each of these categories. Ushakov said Putin "reacted immediately" that any sanction now or later "could lead to a complete severing of ties between our countries". Moscow's troop deployments over the past two months alarmed the West after the Ukraine's Crimea Peninsula was captured in 2014 and  separatists supported troops on its own soil as it chooses.