Chechen-led Islamist guerrillas who held out against Russian forces for two weeks in the province of Dagestan said yesterday they had withdrawn from frontline positions.
Russian news agencies quoted Dagestani television as confirming that the strategically important village of Tando, had been "cleansed of the Islamic extremists".
Earlier, Russia had dismissed the Chechen-backed guerrillas' announcement, saying federal forces still had about 100 rebels pinned down in caves in the remote mountain village.
The pull-out seemed to signal a big victory for new Russian Prime Minister Vladimir Putin. Only 13 days ago Mr Putin had said he would crush the rebels in Dagestan in two weeks.
A rebel spokesman in the Chechen capital Grozny said the guerrillas had been ordered to leave the Botlikh district of Dagestan, which includes Tando, by their commander, Shamil Basayev, and had done so within the last 24 hours.
He read a prepared statement saying Mr Basayev had ordered the "redeployment" of his forces out of the Botlikh district to begin a "new phase" of his uprising. He declined to say where the guerrillas had gone.
"Early this morning, according to Basayev, the commanders of all forces reported that the order had been carried out successfully," he said.
"The Russian command continues to report military activity in the Botlikh district, unaware that there has not been a single Dagestani Mujahideen fighter there for about a day."
The spokesman said the rebels were switching from a "purely military operation" to "military-political" tactics, an apparent signal they were calling a halt to their armed insurrection.
A Russian Defence Ministry spokesman in the Dagestani regional capital Makhachkala described the report as "blatant, unprincipled, unpardonable lies aimed at confusing and misinforming the mass media".
There was no way to confirm whether the rebels had completely evacuated their other main bases, in the villages of Ansalta and Rakhata above Tando.
The word of a guerrilla withdrawal could not come at a better time for Mr Putin, who came to office three days into the rebellion, which his predecessor had said could split Dagestan from Russia if it was mishandled.
Russian officials had made optimistic declarations since the fighting began, but none was more bold than Mr Putin, who announced on August 10th a firm two-week deadline to crush the revolt. A week later he said simply: "They have one week left."
Russian aircraft pounded the rebel positions for days during the Dagestan campaign. More than 40 Russian soldiers were killed, including highly decorated officers. Mr Magomed Tagayev, an official rebel spokesman, said 41 guerrillas had died since the clashes began. Earlier yesterday, Russia said it had scored its most deadly strikes yet on positions occupied by Muslim rebels in Dagestan, but the rebels said Moscow's claim was "self-hypnosis".
President Yeltsin was shown on television meeting Dagestan's regional leader, Mr Magomedali Magomedov.
Mr Yeltsin pounded his fingers on a table and growled: "Dagestan is now our number one priority. Be aware of that."
AFP adds: There were contradictory reports yesterday on the conflict in Dagestan, some claiming Russian forces had taken control of Tando while others said fighting was continuing.
Reports that the Russian forces had captured the south-western town after two days of fierce fighting were "premature," Itar-Tass news agency quoted the defence ministry as saying.
The report spoke of "relatively significant successes," but said heavy fighting was continuing yesterday evening.