EARLY this morning Russian troops were still battling Chechen rebels who put up dogged resistance to an all out attack on the remote village of Pervomaiskoye.
A week long hostage crisis erupted in fighting yesterday when Russian helicopter gun ships, known as "crocodiles", and ground artillery pounded the settlement, providing cover for elite commandos.
As house to house fighting continued well into last night, the Russians failed to completely overcome the approximately 20 well armed "Lone Wolf" guerrillas led by the bearded Mr Salman Raduyev.
The rebels, demanding safe passage back to their nearby home region, have been holding scores of hostages in Pervomaiskoye, near the Dagestani border with Chechnya, since last Wednesday.
Russia's Interior Ministry said about 60 rebels had been killed and 15 wounded in the storming of the village, while the Russian side had four dead and 14 wounded. There was no immediate word on casualties among the hostages, originally estimated to number between 70 and 116.
Eleven hostages have been brought out of the village and 10 rebels have given themselves up, the ministry said.
President Boris Yeltsin, who was strongly criticised by his political opponents, told reporters the assault was necessary to save the lives of the hostages after the rebels had already shot some of them and negotiations had failed.
"We must punish them, and terrorism in general must be uprooted from the Chechen land," he said.
But Mr Raduyev denied in a radio message broadcast in the Chechen capital, Grozny, that his men had killed or intended to kill any of the hostages.
"Not a single hostage was killed yesterday or today and we have no intention of killing them," he said in the message played to reporters, who identified the voice as his.
With a new session of the state Duma, the lower chamber of parliament, due to open today, Mr Yeltsin was sure to come under further pressure from critics out to score points just five months before a June 16th presidential election.
Mr Yeltsin (64), who only returned to his office in December after suffering a heart attacking October, said he would announce in mid February whether or not he will take part in the election.
Many Russians already blame Mr Yeltsin for the Chechnya conflict in which more than 25,000 people have been killed since Russia sent in troops in December 1994 to crush the region's bid for independence.
The liberal Yabloko Party, led by presidential hopeful, Mr Grigory Yavlinsky, planned to launch a no confidence vote in the government today.
"This accident will of course influence the political standings of the president and of the government," said Mr Yavlinsky, referring to the bloodshed in Pervomaiskoye.
Russian military sources said the storming operation was "nearly complete" but would continue through last night, illuminated by white and yellow flares fired by artillery.
"All tonight the federal forces will conduct the operation to liquidate Raduyev's gang," Itar Tass news agency quoted a Federal Security Service (FSB) spokesman as saying.
But rebels in Chechnya, in contact with their besieged comrades, said Russian forces had been pushed out of the settlement after seven attempts to take it.