In an address to the State Duma, he said Russia was ready to wipe out "terrorist bases" inside the breakaway republic and order Chechen leaders to hand over Islamist rebel commanders.

Three blasts in the Russian capital and one in the republic of Dagestan have left more than 250 people dead since the end of August.

Many Russians have blamed Islamic militants based in Chechnya for the attacks.

Rescue workers have abandonned all hope of survivors

The Emergencies Ministry has put the final death toll from Monday's attack on a Moscow apartment block at 118, including 13 children, slightly lower than its earlier estimate.

Only four residents of the block survived the explosion.

Rescue workers are continuing to search the wreckage, but say they have given up hope of finding any more survivors.

Bomb defused

On Tuesday, detectives discovered several tonnes of explosives at another housing block nearby, the Russian Interior Minister said.

Vladimir Rushailo said that 3,800kg of explosives had been seized.

The BBC's Andrew Harding reports: "Peolpe are bracing themselves for ffurther attacks"

He told reporters that 16 charges and a 70-metre length of fuse wire were found in a block near Borisovskye Prudy Street.

The explosives were "virtually primed to go off", the minister said. The apartment block has been evacuated and the explosive defused.

Security measures have been stepped-up across Moscow.

Economic sanctions

Mr Putin said the bombings had been carried out by well trained saboteurs.

Vladimir Putin: Tough measures

"We must have a new plan to govern our relations with Chechnya," Mr Putin said.

He also declared that "tough economic sanctions" were needed.

On Monday, President Yeltsin said "terrorists" had declared war on the Russian people.

"We are living under a growing terrorist threat. This means that we must unite all forces in society and in government to repel the enemy from within," he said.

Suspects

Three people suspected of being linked with Monday's blast have been detained, police said on Tuesday without giving any details.

An official holds pictures of the three suspects police wish to interview

Police released sketches and photographs of three other men suspected of involvement in the bombing, including a man who allegedly rented space in the building and in another Moscow apartment building in Guryanova Street that was blown up last Thursday.

At least 93 people died in that blast.

Tension is high in the Russian capital and across the country.

There were reports on Monday night of big traffic jams, as those who could escaped out to their country cottages.

The police said they had 200 bomb scares in the capital during the night. They are checking people's identity papers at metro stations and other crowded areas.

President Yeltsin has ordered tight security at airports, nuclear power stations, oil pipelines and other possible targets across the country.

He has ordered Moscow Mayor Yuri Luzhkov to have all the 30,000 residential buildings in Moscow searched for explosives.

BBC Moscow Correspondent Robert Parsons: "Moscow has been swept by panic"

Police said on Tuesday afternoon that more than 26,000 had been checked.

Apart from the police and the Federal Security Service, the army is now involved in the operations.

The Islamic connection

Khattab has threatened terrorist attacks against Russia

Interior Minister Vladimir Rushailo blamed the latest two explosions on Chechen warlord Shamil Basayev, who has been leading the armed rebellion against Russian rule in Dagestan, and another Chechen fighter of Jordanian origin known as Khattab.