Islamic rebel fighters clashed with Russian troops south-west of the Chechen capital Grozny, but Russian leaders again rejected media talk that they were planning a full-scale ground offensive.
Reacting to growing Western unease about the continued fighting, President Boris Yeltsin spoke by telephone with President Jacques Chirac of France to reassure him that Russia was using "moderate methods" to end the Chechen crisis.
Speaking on RTR state television, the Prime Minister, Mr Vladimir Putin, stressed that Moscow wanted to avoid unnecessary loss of life in its bid to crush the Islamic guerrillas.
"We will not undertake the tactics of a large-scale military action with tank attacks and the storming of towns," he said.
Eyewitnesses said the Chechen fighters and Russian forces exchanged fire yesterday near the village of Bamut about 70 km (40 miles) south-west of Grozny.
Reuters television footage showed several dozen fighters using guns and artillery against the Russian forces, estimated to be located about 1.5 km away from Bamut. Return gunfire could be heard from the Russian troops.
In Moscow, a spokesman for Russia's Defence Ministry said he could neither confirm nor deny the clashes, but military officials denied their troops had moved any closer to Grozny. They also declined to comment on an Interfax news agency report that troops had bombed a cement plant 25 km south of Grozny.
Russian forces now occupy a third of Chechnya, mostly lowlying areas north of the Terek River which are traditionally sympathetic to Moscow.
They have also moved to secure key points in western and eastern parts of Chechnya in their drive to seal off the rebel republic, which has been largely outside Moscow's control since 1991 and which claims full independence.
Speaking in the southern Russian town of Vladikavkaz, Gen Viktor Kazantsev, commander of Russian forces in North Caucasus region which includes Chechnya, said there was no order to take Grozny.
"We don't yet know whether we will take Grozny, we have the capability to take it," he said. "We do know that we will still occupy the heights around Grozny."
Russian leaders have not ruled out storming the capital, although they say they want to avoid a repeat of the ill-fated war in 199496 in which tens of thousands were killed.
Gen Kazantsev said he believed talks with Chechnya's relatively moderate leader, Mr Aslan Maskhadov, were possible but not in the coming days.
Mr Maskhadov has repeatedly called for talks with Moscow, but Mr Putin says he must first hand over guerrilla leaders like Mr Shamil Basayev and Arab-born Mr Khattab. Mr Putin blames the fighters for a series of bomb blasts in Russia.
Interfax yesterday quoted Mr Maskhadov as saying the Russians had so far lost 1,500 men in the Chechen campaign as well as four planes and 10 helicopters. Russia says it has lost 47 men.