Russian authorities accused Ukraine of trying to carry out drone strikes on the Kremlin overnight to assassinate President Vladimir Putin, and warned of possible retaliation.
Ukraine's government denied any involvement, accusing Moscow of using the incident as a pretext for escalating attacks in Ukraine.
The Kremlin's press service said on Wednesday Russian air defenses shot down two drones attempting to strike Putin's residence inside the Kremlin walls.
"We regard these actions as a planned terrorist act and an attempt on the life of the president," the Kremlin said.
Putin was not in the building at the time of the alleged attack, Kremlin spokesman Dmitry Peskov told Russian state news agency RIA Novosti.
The Kremlin said no one was harmed and there was no material damage as a result of the falling fragments of destroyed drones.
Footage shared on social media, which could not be independently verified, allegedly showed an explosion above the Kremlin.
Moscow has accused Ukraine of carrying out previous attacks and sabotage in other parts of Russia, which Ukraine denies.
Ukrainian officials have rejected this latest account.
"We are not attacking Putin or Moscow. We are fighting on our territory, defending our villages and cities," Ukrainian President Volodymyr Zelenskyy told reporters during a visit to Helsinki on Wednesday. "They will invent escalatory schemes every day."
A Ukrainian presidential adviser, Mykhailo Podolyak, suggested on Twitter it could have been the work of "local resistance forces." Podolyak alleged the Kremlin is using this incident as a pretext to justify large-scale attacks on civilians in Ukraine.
U.S. Secretary of State Antony Blinken said Washington could not confirm the reports of an attack and that any such accounts from the Kremlin should be viewed with heavy skepticism, according to The Washington Post.
Analysts also cautioned against considering such a drone attack, even if it proves true, as an attempt to assassinate Putin.
The Russian government warned of eventual retaliation for the alleged plot.
"The Russian side reserves the right to take retaliatory measures where and when it sees fit," the Kremlin said.
This is a developing story. Check back for updates.
Audio conversation with National Security Correspondent Greg Myre edited by Andrew Sussman and Sarah Handel, produced by Alejandra Marquez Janse.