The Russian President called for a new treaty on Chechnya's political status after talks yesterday with the breakaway republic's President, Mr Aslan Maskhadov.
Russia and the North Caucasus republic, which fought a 21-month war that ended last August, must "think about future steps towards the freedom of the Chechen republic - independence or something else, whatever to call it", Mr Boris Yeltsin said.
"We do not need to get stuck on this. We need to create a joint group to sit down and prepare this document, this accord together," Mr Yeltsin added.
Mr Yeltsin's offer fell short of Mr Maskhadov's goal of immediate recognition of his republic's declaration of independence.
Despite the resistance which forced the Russian withdrawal last year, Moscow still insists it has sovereignty over Chechnya and that it can allow it nothing more than autonomy.
Mr Maskhadov said later: "We are demanding today that Chechnya be recognised as an independent state and we want first to get Russia's accord." The commission could begin work from next week and he believed he had "convinced Boris Yeltsin to put a full stop on the definition of relations with Chechnya", he said.
The 1 1/2-hour meeting between Mr Yeltsin and Mr Maskhadov was the leaders' second since the end of the war.
They also covered a dispute over Russian aid to Chechnya. Yeltsin acknowledged that it was not getting all the money it had been allotted.
"Eight-hundred billion rubles (£94 million) have been sent to Chechnya, but only 120 billion rubles have appeared in the Chechen national bank," Mr Yeltsin was quoted as saying. "This money, damn it, is leaking somewhere," he said.
Before the talks, Mr Maskhadov said: "All the money that has reached Chechnya so far this year adds up to less than Russia spent on a single day of war."
Yesterday's meeting came amid a breakthrough in Chechnya's hostage-taking crisis. Three NTV television journalists were released after 101 days in captivity. On Sunday, two other Russian journalists were freed.
But two British aid workers remain missing in Chechnya, along with several other aid workers who have been kidnapped in neighbouring Russian regions.