Military sources and displaced people say 50 separatist fighters and many civilians have been killed.

Fierce air and artillery attacks hit Katyr-Yurt and other villages on Saturday, Chechen field commander Akhmed Basnukayev said.

"We don't know what's going on there now," she said. "There will definitely be casualties. I only hope the Russians let the people out."

The Russians suspect the villages are harbouring some of the 3,000 rebels who have broken through the blockade of the capital since Monday.

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They aim to prevent the rebels from reaching mountain strongholds to the south, where thousands of their comrades are concentrated.

Refugees from the villages said most rebels had already broken through Russian lines and fled, and that only injured fighters remained.

Rebel attack

But in a setback for federal forces, Chechen rebel fighters made a surprise attack on Katyr-Yurt, forcing a detachment of Russian interior ministry troops to withdraw.

The Russians say they pulled out after being heavily outnumbered by about 1,000 rebels and after three of the interior ministry troops were killed.

Dozens of civilians are being treated in hospitals in neighbouring Ingushetia after coming under fire in the attacks.

One woman told how she received shrapnel wounds in her back and legs after shielding her one-month-old child from an artillery attack in nearby Zakan-Yurt.

Missing reporter

There is also growing concern over the fate of a Russian reporter who was handed over by the army to Chechen rebels in exchange for two Russian soldiers.

The journalist, Andrei Babitsky, an employee of the American-funded Radio Liberty, was detained by the Russians for more than two weeks for allegedly working in Chechnya without accreditation.

Meanwhile, Russian troops are continuing to advance further into Grozny and are reported to be meeting little resistance.

Russian television said Grozny was largely quiet on Saturday, apart from a few skirmishes between remaining rebels and troops.

But Valery Manilov, first deputy chief of the General Staff, told NTV commercial television it was still too early to declare the operation in Grozny complete.

"As the task of freeing Grozny from bandit groups is carried out, it allows us to regroup forces in the southern direction to complete the routing and liquidation of bandit groups in the Argun Gorge and mountainous regions," he said.

He said he believed about 7,000 fighters remained in the southern mountains of the breakaway republic and about 1,000 were still hiding out in Grozny.

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