NATO's chief said there was no evidence and the UK's PM said the latest intelligence was "still not encouraging", after Russia claimed its troops were pulling back from Ukraine's border.
Russian forces deployed near Ukraine's border have begun returning to their garrisons, says Russia's defence ministry.
But NATO and British officials have stressed they have not yet seen any clear signs this is happening.
The withdrawal of some Russian troops was announced on Tuesday morning by Major General Igor Konashenkov, the defence ministry's spokesperson.
"As the military military training activities are over, as always, marches will be carried out in a combined way to permanent dislocation points," he said in a video released on social media.
"The units of the Southern and Western military districts that have completed their tasks have already started loading railroad and motor vehicles and today they will start moving into their military garrisons," he added.
Russia has deployed more than 100,000 troops and military equipment along its shared border with Ukraine in recent months, stoking fears it might invade its neighbour, an accusation Moscow has continuously rejected.
It has however demanded guarantees from NATO that Ukraine and other former Soviet nations will never be allowed to join the security alliance, which Western allies have rejected, citing the right of all nations to self-determination.
The latest announcement could potentially be seen as the first sign of de-escalation from Moscow.
But NATO Secretary-General Jens Stoltenberg said on Tuesday the Western alliance had still not seen any signs of a reduced Russian military presence on the Ukrainian border or "any signs of de-escalation on the ground".
"Russia has amassed a fighting force in and around Ukraine, unprecedented since the Cold War," he emphasised. "Everything is now in place for a new attack."
Signs from Moscow that it is still willing to engage in dialogue "gives some reason for cautious optimism", Stoltenberg told a news conference, adding that NATO would continue to follow closely what was happening on the ground, to see whether it amounted to a "real de-escalation".
British Prime Minister Boris Johnson echoed that, telling reporters the latest intelligence "we're seeing today is still not encouraging" and highlighting that Russia is erecting fields hospitals near the Ukrainian border and in Belarus which he said "can only be construed as preparation for an invasion".
"You've got more battalion tactical groups actually being brought closer to the border with Ukraine," he added, and that Moscow has "huge preparation ready to go (into Ukraine) at virtually any moment".
So mixed signals, I think at the moment," he concluded.
French government spokesman Gabriel Attal also said it would be a "positive signal" from Moscow if the withdrawal of some of the troops is confirmed. He said that President Emmanuel Macron has changed his agenda for the day, indicating that "exchanges are planned at the level of heads of state" in the coming hours.
Ukrainian foreign minister Dmytro Kuleba reacted to Moscow's announcement that it is withdrawing some troops from the border, saying: "Together with our partners, we have managed to prevent any further escalation by Russia."
He cautioned this, however, by adding that "Russia makes all kinds of statements all the time, so we have a rule: we will believe in de-escalation when we see the withdrawal of troops."
'Crucial window for diplomacy'
Western allies have instead drawn up a list of "severe" economic sanctions in a bid to dissuade Moscow from undertaking any military incursion into Ukraine amid a flurry of high-level diplomatic talks between Russia and the West and among NATO members. Defence ministers from the transatlantic security alliance are gathering for a two-day meeting in Brussels on Wednesday.
Russia's announcement comes as German Chancellor Olaf Scholz met President Vladimir Putin on Tuesday.
The Russian leader insisted he does not want a war around Ukraine. He said Moscow is ready for talks with the US and NATO on limits for missile deployments and military transparency, even though Russia had not received positive answers to its security demands.
Scholz said he agrees that diplomatic options are "far from exhausted", describing the announcement of troops being pulled back as a "good signal".
Tuesday's meeting comes after a flurry of intensified diplomatic moves in recent days in an attempt to avoid war.
Putin also discussed the ongoing situation with the leader of the US and France, Joe Biden and Emmanuel Macron, over the weekend.
Scholz, who visited Kyiv on Monday, reiterated the West's support for the"sovereignty and territorial integrity of Ukraine". He had also requested Moscow "urgently" show signs of de-escalation.
Russian troops are for now also deployed in Belarus to take part in joint military exercises scheduled to end on 20 January. Moscow has also moved six warships into the Black Sea.
But Moscow appeared to back the diplomatic route on Monday with Foreign Minister Sergei Lavrov replying to a question from Putin on whether there is "a chance" negotiations with Washington and NATO allies can yield results, by saying: "I think we should continue to pursue and build on them (negotiations) at this point."
Biden and Britain's Prime Minister Boris Johnson also agreed during a call on Monday evening that there "remained a crucial window for diplomacy."
Click on the player above to watch Euronews' interview with Mark Galeotti, a professor at University College London's School of Slavonic & East European Studies.