Russian Prime Minister Dmitry Medvedev is in Crimea - the most senior Russian to visit the region since Russia seized it from Ukraine earlier this month.
Mr. Medvedev says he is leading a delegation of Russian officials for a meeting on what he calls the "development" of the peninsula.
The prime minister says Russia will create a special economic zone in Crimea, offering incentives for business with lower taxes and simpler rules. Mr. Medvedev also promised to boost salaries and pensions in Crimea.
His meeting Monday comes a day after U.S. Secretary of State John Kerry demanded Russia pull back thousands of its troops massed along the eastern and southern Ukrainian border.
Kerry told Russian Foreign Minister Sergei Lavrov in Paris Sunday that the troops are creating a "climate of fear" in Ukraine and that their presence does nothing for diplomacy.
Lavrov did not directly comment on the Russian forces. But he spent much of last week assuring the United States that Russia has no plans to cross the Ukraine border.
Kerry said he and Lavrov agree that Ukrainians have the right to determine their own future.
The United States estimates Russia has 40,000 troops along the border, while Kyiv says the number is closer to 100,000.
Russia has said it has the right to protect Russian speakers in Ukraine, and used that as justification for taking over Crimea.