The air and artillery bombardment against the capital has continued unabated as Moscow accused the Chechen rebels of endangering the lives of those they claim to protect by using home-made chemical weapons.

Ground troops are reported to have been involved in fierce street battles in the outskirts of the city as Russia's major operation to seize the city moves into its second week. Tens of thousands of civilians are believed to be hiding in the city.

Refugees who have escaped the city say that these people are hiding in freezing cellars, too afraid to venture out for food or water or even risk fleeing the city.

Military commanders say federal troops now hold 10% of the Chechen capital but correspondents say the battle is not going smoothly and they remain a long way from taking the city centre.

They say the Russian army is bogged down and being outmanoeuvred by the experienced Chechen rebels.

However, the Russian military says paratroopers overran strategic heights near the rebel stronghold of Vedeno in the southern mountains on Saturday.

'Gains in the south'

There are also reports of fierce fighting at the entrance to the Argun gorge, which links Chechnya to Georgia.

Television reports from Moscow said Russian fighter jets and combat helicopters had flown about 100 combat mission over southern Chechnya during the past 24 hours.

The BBC's Moscow correspondent Andrew Harding, says that with the slow progress made in Grozny, the Russians are keen to highlight greater successes elsewhere.

But Chechen officials say many civilians are trapped in villages in the area because of the constant shelling. One official said he was trying to negotiate a safe corridor to allow them to leave for Russian controlled areas in the north.

Reports of the Russian gains in the south come a day after the country's acting president, Vladimir Putin, said his elevation to the Kremlin would not lead to a change in policy over the Chechen conflict.

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'Chemical bombs'

But he denied that he had ordered military operations to be completed before presidential elections in 90 days.

The acting president - who has become immensely popular in Russia over the Chechen campaign - was speaking after returning to Moscow from a morale-boosting visit to troops.

As the battle for Grozny continued, Moscow said that Chechen rebels were using anti-tank shells containing chlorine and ammonia in an attempt to repel federal troops in the city's eastern suburbs.

Russian news agencies reported that a green cloud had hung over the city and the military had issued two chemical alerts. Officials said that jthe Chechen rebels were endangering the lives of civilians still in the capital.

Chechen officials have denied the accusation and there has been no independent corroboration of the reports from western journalists.

According to the United States Defence Department, the Russians have, for the first time, launched Scud missiles against Chechen positions, although the exact targets are unclear.

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