"Building up military hysteria will lead to nothing good".
The Russian leader believes that Pyongyang perceives nuclear weapons as its only protection, and will not abandon them.
The US wants the UN Security Council to impose an oil embargo on North Korea, ban its exports of textiles and the hiring of North Korean laborers overseas, and to subject leader Kim Jong Un to an asset freeze and travel ban, according to a draft resolution.
China is by far North Korea's biggest trading partner, accounting for 92 percent of two-way trade past year.
Seoul and Tokyo's foreign ministers echoed their leaders' comments in separate ministerial talks also held on Vladivostok.
Putin's comments, following an worldwide summit in China, came after the United States called for the "strongest possible measures" against North Korea for detonating what it called a hydrogen bomb on Sunday.
It plans to send a delegation to Washington next Wednesday for a four-day visit to promote its drive for the redeployment of USA nuclear weapons, which were withdrawn from South Korea in the early 1990s. "And the military would say, 'Who cares?' As long as the United States is destroyed, then we are all starting from the same line again'".
Trump again pointedly declined to rule out a U.S. military response following North Korea's sixth and most powerful nuclear test as his administration seeks increased economic sanctions, saying Pyongyang was "behaving badly and it's got to stop".
When he says that the two Koreas must co-exist peacefully, does it include condoning the highly provocative acts of shooting unsafe weapons over the territories of one's neighbours?
The announcement and North Korea's claim that it could mount the warhead on a missile dramatically upped the stakes in Pyongyang's standoff with the global community over its banned weapons programmes.
For that, the South Korean president asked for "the people's understanding".
Wang Yi said China hopes North Korea would "see the situation clearly and come to the right judgement and choice".
In talks overnight, US President Donald Trump and South Korea's Moon Jae-in agreed in principle to scrap a warhead weight limit on the South's missiles, which are now capped at 500kg (1,100lb), giving it a greater strike force against North Korea. There's environmental risks if radiation spills across its northeastern border.
He dismissed a question whether he was disappointed in Trump as "naive".
Mr Putin said Russia's trade with North Korea was negligible and did not violate current worldwide sanctions.
Moon earlier called for a ban on overseas North Korean workers, who are a key foreign currency source for the North, but Putin said problem should be solved diplomatically, according to Seoul's presidential office. "The second thing we cannot accept, in any case, is a war on the Korean peninsula", Cho said at a luncheon organised at a think-tank.
Speaking to CNN reporters, North Koreans on the street appeared unconcerned about further sanctions and threats of military action from the United States. Kim had seen how western intervention in Iraq had ended in the overthrow of Saddam Hussein after which the country was ravaged by war, Putin warned, and Kim was determined not to suffer the same fate.
Putin said it was important that all parties affected by the crisis, including North Korea, not face "threats of annihilation" and "step on the path of cooperation". He expressed support for Russia's Energy Super Ring plan, which aims to build energy links between its Far East and Asia Pacific region, saying it would help create "the world's largest energy community". Russia's exports of crude oil to North Korea are about 40,000 tonnes a year.
Sunday's blast was the North's sixth nuclear detonation and by far its biggest to date. "It seems that Pyongyang is betting on impossibility of China's full abandonment of it".
North Korea has shown no signs of changing its tone or ambitions.
The drills "do not target any particular goal or country", and were part of an annual plan meant to boost the troops' capability, China's Defence Ministry said on its website, in a response to media.
One common view in Beijing is that Trump's war rhetoric has only made Kim more insecure, prompting him to accelerate his weapons program.