President Vladimir Putin announced Sunday that the US will have to slash its diplomatic staff in Russia by 755 after Moscow struck back against new sanctions passed by the US Congress.
The move represents one of the biggest single reductions of US personnel by Moscow, with Putin warning he could retaliate further even if he plans to hold off for now.
"We have waited long enough, hoping that the situation would perhaps change for the better," the Kremlin strongman said.
"But it seems that even if the situation is changing, it's not for any time soon."
Putin's spokesman Dmitry Peskov on Monday insisted that any hopes of mending Russia-US ties rest on "curing the worsening political schizophrenia" in Washington, but admitted the two sides appeared "far away" from any improvement.
But he did insist Russia remained keen on "continuing cooperation in the areas that correspond to our interests", suggesting Moscow remains open to working together on Syria after agreeing a ceasefire with the US in the south of the war-torn country.
The US State Department earlier called Moscow's move "regrettable and uncalled for" and said it was "assessing the impact of such a limitation and how to respond."
US Vice President Mike Pence while on a visit to Estonia on Monday said: "We hope for better days, for better relations with Russia."
He stressed that "recent diplomatic action taken by Moscow will not deter the commitment of the United States of America to our security, the security of our allies."
'Choice for US'
The US Senate on Thursday overwhelmingly approved a bill to toughen sanctions on Russia for allegedly meddling in the 2016 US presidential election and its intervention in Ukraine. Iran and North Korea are also targeted in the sanctions bill.
The White House said Trump intends to sign off on the legislation despite complaining earlier it would cut off the president's room for diplomatic manoeuvring.
Russia's foreign ministry on Friday struck preemptively by ordering Washington to reduce its diplomatic presence to 455 by September 1 to match the size of Russia's mission in the US.
It also froze two embassy compounds - a Moscow summer house and a storage facility in the city - from August 1.
The US embassy has refused to state how many staff it has at its embassy in Moscow and consulates in the cities of Saint Petersburg, Yekaterinburg and Vladivostok.
But Putin confirmed that the move means 755 US diplomats and local Russian personnel will be forced to stop working.
Peskov said it was now a "choice for the US" on which staff Washington chooses to axe from its missions around the country, adding he did not know if this would now make it harder for Russians to get US visas.
Ties between Russia and the US slumped to their lowest since the Cold War as Washington slapped sanctions on Moscow over its 2014 seizure of Crimea from Ukraine and backing for an insurgency in the country.
In response to allegations of Kremlin election hacking then US president Barack Obama in December ordered out 35 Russian diplomats and closed down two embassy summer houses that Washington said were being used by Moscow for espionage.
At the time, the Kremlin said it would put any retaliation on hold as it waited for Trump to take office.
The billionaire repeatedly pledged to fix ties during his campaign but allegations Putin launched a hacking and influence to get him to the White House made any concessions to Russia politically toxic.
Now analysts agree that the Kremlin's decision to strike back at the US showed Moscow had lost patience on Trump making good on his promises.
"Hopes for improvement in relations between Russia and the US have definitively dissipated," Vedomosti business daily wrote in a front-page editorial Monday.
"The Russian leadership up to the last moment kept hope that it would be possible to somehow build cooperation with the US," Dmitry Suslov from Moscow's Higher School of Economics told Kommersant FM radio.
"But in the light of the Congress decision, it is absolutely obvious that this is impossible."