Fighting in Dagestan spread into northern parts of the republic yesterday as Russia launched its heaviest air assault to date on strongholds held by Muslim rebels in the Caucasus mountains.
At the same time, the Russian Prime Minister, Mr Vladimir Putin, appeared to be taking a softer line over the conflict, saying that "international conflicts, including the problems in Chechnya, cannot be solved through military means".
Snipers from neighbouring Chechnya shot one Russian soldier and wounded another near the northern Dagestani town of Kizlyar, the Russian interior ministry press centre said.
Russian jets and helicopters responded by delivering 37 rocket strikes against the rebel strongholds, the heaviest air assault since fighting began on August 7th. Twenty rebels were reported killed in the raids.
Official Russian sources said bombers also briefly crossed into Chechnya to deliver hits against the towns of Benoy and Kenkhi where rebels have reportedly established bases.
A total of 44 Russian and Dagestani soldiers have died, 183 have been injured and eight have gone missing in the two weeks of fighting in Dagestan, according to the Russia interior ministry.
But an interior minister quoted by ITAR-TASS said losses were greater on the rebel side. Russian sources have said hundreds of Islamic fighters have been killed, a claim the rebels reject.
In Grozny earlier, a spokesman for the rebels said 80 Russian soldiers had died in a battle for control of the village of Tando, site of fierce fighting in recent days between the Russian forces and the Muslim insurgents.
The interior ministry said the rebels were seeking safe passage back to Chechnya and threatening to launch attacks against civilians in North Ossetia and Ingushetia if their demands were not met, ITAR-TASS said.
Yesterday's fighting raised fears in Moscow that the violence might spread to other regions of the Northern Caucasus, bringing further bloodshed to a region already wracked by the 1994-1996 Chechen war.
Chechen officials in the capital, Grozny, said they had begun to bolster their security presence and dig trenches along the northern border with Dagestan because of "endless shelling" from Russian soldiers.
Russia meanwhile massed troops and heavy equipment to prepare for a major ground offensive.
Reports of high casualties among the Russian forces were brushed off as propaganda by Moscow but an interior ministry spokesman admitted that gunmen had taken three more villages in the Botlikh region.
In Moscow, the interior ministry reported it had intercepted radio communications between gunmen indicating they were preparing to conduct strikes both in Dagestan and other southern Russian towns.
The ministry said that gunmen might be preparing to take hostages in several key points in the Dagestani capital Makhachkala. Russia's largest cities, including Moscow, have been put on a heightened security alert because of the Dagestan conflict, which analysts and defence sources say could last for months.
Mr Putin earlier this week vowed to dislodge gunmen from Dagestan within seven days, but his tone was softer while visiting the Novgorod region yesterday.
"The Chechen problem must be resolved through political means, and this is what we intend to do," Mr Putin was quoted as saying by ITAR-TASS.