The Russian defence ministry said it had intelligence reports of between 400 and 500 rebels preparing to cross into Dagestan from positions inside Chechnya.

Russian officials say they have also intercepted radio communication indicating the militants are preparing new strikes across southern Russia and may be preparing to take hostages in the Dagestani capital, Makhachkala.

The Russian attacks are reported to be the heaviest to date and correspondents say they raise the prospect of a widening of the two-week conflict.

State of emergency

Russian troops train for deployment in Dagestan

Meanwhile hundreds of Chechen reservists are reported to be digging trenches along the border, to guard against any Russian incursion.

They say they are boosting security in response to "endless shelling" by Russian soldiers and have declared a state of emergency.

Between 1994 and 1996 Russian forces conducted a disastrous campaign against separatist rebels inside Chechnya in which tens of thousands of troops were killed.

So far Russia has avoided renewed ground operations in Chechnya but officials have warned of "intensive military actions" until the rebels are evicted.

Ground offensive

Troops and heavy equipment have been heading towards Dagestan in what Russian military officials say is the preparation for a major ground offensive.

Fighting was also reported to have spread to northern Dagestan on Friday after Chechen snipers shot one Russian soldier and wounded another near the town of Kizlyar.

Moscow says it has reports of new rebel offensives

Russian jets and helicopters responded with about 40 rocket strikes on the rebel positions.

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At least 20 rebels are reported to have been killed in the latest Russian raids.

The Muslim rebels, who come from the fundamentalist Wahhabi sect, are seeking to install Sharia law and have declared a holy war on Russia.

They declared independence in Dagestan 12 days ago after crossing the border into the Botlikh district of the republic.

They have reportedly named a veteran of the Dagestani Islamic movement, Sirazhdin Ramazanov, as head of their self-proclaimed government.

Kidnap risk

The fighting has caused an estimated 10,000 refugees to flee towards the Caspian Sea coast.

International aid agencies say they are unable to help because of the high risk of kidnapping in the area.

Russian officials have so far admitted losing 40 soldiers in the fighting in Dagestan and say the rebels remain in control of six villages there. The rebels say they are holding 15 villages.

Speaking in the Chechen capital Grozny, a rebel spokesman told reporters that at least 80 Russian soldiers had been killed in recent fierce fighting near the village of Tando.

The village gives the rebels access to a key supply route into Chechnya.

The rebels say they are more familiar with the rough mountain terrain than the Russian troops and have made much more progress against the larger Russian forces than they originally thought possible.

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