Chechen fighters repel hostage rescue

THERE was a grim stalemate in the southern Russian town of Budennovsk last night after two chaotic and bloody attempts by Russian troops to free 1,000 hostages held in a hospital by Chechen rebels.

Russian special forces made a first assault at dawn but failed to take most of the hospital in fierce gunbattles with the Chechen fighters, who claim to have rigged the building with explosives. The second assault, which began with heavy shooting and tank fire, left the hospital on fire, but still with many or most of the hostages inside.

Between the attacks, white flags made of bedsheets were waved from the hospital windows, apparently by the hostages in a desperate bid to prevent the army making another lethal attempt to save them.

The gunmen seized the hospital on Wednesday after a commando-style raid on the town of 100,000, which lies about 80 miles from the border with rebel Chechnya. They want Russia to stop its military campaign in their country and they have threatened to kill all the hostages if their demands are not met.

In Halifax, Nova Scotia, the Russian President, Boris Yeltsin, was sharply criticised by the Group of Seven leaders on the final day of their summit over his handling of the crisis in Chechnya. Mr Yeltsin joined the G7 leaders for talks on political and security matters after the Russian troops made their first attempt to storm the hospital.

He told reporters as he hurried to the summit session that five Russian soldiers were killed in the bloody assault and 160 hostages were freed. He said he had agreed with his Interior Minister, Viktor Yerin, before leaving Moscow that Russian troops should be authorised to storm the hospital. But it was not clear whether he had directly ordered both or indeed either of the assaults.

At least 100 women and children were reported to have used the lull in the fighting yesterday morning to file out of the barricaded building before Russian shells started landing again in the afternoon. They included pregnant women and mothers clutching babies. Many lashed out at the troops shooting at the hospital and said this meant more lives would be lost.

"All hostages injured this morning were hit by Russian fire," said a doctor, Vera Chepurina, leaving the building to appeal for a halt to the shooting. "We must stop this."

The Chechen guerrillas holed up in the hospital, thought to number about 60, have warned of a bloodbath if Russian troops try to storm the building. Their leader, Shamil Basayev, said he had rigged the hospital with explosives and was prepared to blow it up.

Death rides in, page 15