Russia's Prime Minister Dmitry Medvedev has arrived in Crimea - the most senior Russian official to visit since it was annexed from Ukraine.
Mr Medvedev announced that the region would become a special economic zone, with incentives for businesses.
The Russian government says it is creating a new ministry to deal with Crimea and Sevastopol.
Moscow's annexation of Crimea earlier this month has sparked international condemnation.
Mr Medvedev, leading a delegation of government ministers to the peninsula's main city Simferopol, said that no-one in Crimea should lose anything in the accession to Russia, according to the Russian government's Twitter feed.
Pensions and public sector salaries would be increased, it added.
The government also announced health insurance for Crimea residents and the introduction of Russian educational standards in schools.
The Russian prime minister described the development of Crimea as a "state priority".
"I am not going to conceal it: the resolution of this task will require very significant concentration of efforts," he said in an address broadcast on Russian state television.
'Illegal and illegitimate'Meanwhile, four hours of "frank" talks on Sunday between the US Secretary of State John Kerry and his Russian counterpart, Sergei Lavrov, ended without a breakthrough.
Mr Kerry's description of what should be up for discussion covered quite a lot on Russia's wish list: rights for national minorities, language rights, the disarmament of irregular forces and inclusive constitutional reform, including - most importantly - the idea of federalising Ukraine.
No wonder Sergei Lavrov looked satisfied and called the talks "very very constructive," while John Kerry just looked tired. It's true the Americans are insisting that all negotiations must be subject to the approval of the government in Kiev - which has already dismissed the idea of federalism as unacceptable. But if the issue is on the table, from Russia's point of view, that is the first step.
In other ways, too, Mr Kerry seemed less than forceful: Russian troops massed on Ukraine's border were "intimidating" and "inappropriate," but he admitted they were on Russian soil so legally there could be no demand they were moved. And he made no American call for Russian troops to be pulled back in Crimea, or for the annexed territory to be returned to Ukraine. The impression left was that Washington is bending over backwards in its search for a diplomatic solution to stop this crisis getting worse.
Mr Kerry told reporters in Paris that the US still considered Russia's takeover of Ukraine's Crimea region to be "illegal and illegitimate".
He said he had stressed that no decision on Ukraine's future could be made without Kiev's involvement.
Earlier Mr Lavrov said Ukraine should become a loose federal state - a suggestion Kiev rejects as an attempt to dismember the country.
Russia's decision to take over Crimea - following the ousting of Ukraine's pro-Moscow President Viktor Yanukovych after months of protests - has triggered a crisis in relations between Russia and the West.
The US and the European Union have imposed sanctions on members of President Vladimir Putin's inner circle and other officials. Russia has retaliated with its own sanctions on US lawmakers.
Phone callSunday's crisis talks between the US and Russia's top diplomats were hastily arranged following a phone call between Mr Putin and President Barack Obama on Friday evening.
The US says that Russia is massing troops on its border with eastern Ukraine, and fears that Moscow might seek to take over further areas of the country.
Ukraine's defence ministry told the AFP news agency on Monday that Russia appeared to be reducing its troops on the Ukrainian border.
"In recent days, the Russian forces have been gradually withdrawing from the border," spokesman Oleksiy Dmytrashkivskiy was quoted as saying.
As the rest of Europe put their clocks forward by one hour on Sunday morning, Crimea aligned its time with Moscow - jumping two hours ahead. Hundreds of people waving flags greeted the time change in Simferopol.
Voters in the mainly pro-Russian peninsula backed leaving Ukraine for Russia in a referendum on 16 March. But the vote has been condemned as illegal by Kiev and the UN General Assembly.
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