Chechnya peace hopes fade as Yeltsin picks hardline minister

Hopes that Boris Yeltsin might be softening his policy towards Chechnya dimmed yesterday when the Kremlin leader appointed the commander of Russia's troops in the breakaway Caucasian region as Moscow's new Interior Minister.

The post fell vacant last week when Mr Yeltsin made a number of top officials bear responsibility for a raid by Chechen gunmen on the southern Russian town of Budennovsk in June.

Wednesday's appointment of Vyacheslav Mikhailov, formerly Moscow's peace negotiator in Grozny, as the new Nationalities Minister seemed to indicate a more conciliatory approach. But when the more powerful job of Interior Minister went to Colonel-General Anatoly Kulikov yesterday, it became clear the hardliners had not lost their influence over President Yeltsin.

Gen Kulikov, an Interior Ministry man himself, has been heading a joint operation by army and Interior Ministry troops in Chechnya. He has overseen the terrible destruction of the region and has clashed with Viktor Chernomyrdin, the Prime Minister, who favours finding a peaceful solution.

Gen Kulikov is, however, attending the latest round of peace talks in Grozny and yesterday he said a telephone link had been established with Chechen field commanders which would help the disarmament process if a general peace agreement was reached.

Gen Kulikov takes over as Interior Minister from Viktor Yerin, who earlier this week was demoted to deputy head of foreign intelligence. No replacement has yet been announced for Sergei Stepashin, sacked as head of internal security in the political furore over the Budennovsk raid.

The attack by the Chechens on a town in Russia proper - in which they took hundreds of hostages in the local hospital before escaping back to Chechnya unscathed - forced Moscow to take peace negotiations seriously for the first time since the Kremlin sent troops to the region last December.

Initially the talks looked as if they might stand a chance of success. The peacemaker Mr Chernomyrdin was in the ascendancy in Moscow after negotiating a relatively bloodless end to the hostage crisis. A Russian negotiator, Arkady Volsky, even went into the Caucasian mountains earlier this week to have the first face-to-face meeting with the Chechen leader, General Dzhokhar Dudayev.

But when the talks resumed yesterday, they were beset with new difficulties. Since Mr Volsky's meeting with Gen Dudayev, at which he extracted a promise from the rebel leader that he would step down if Moscow recognised Chechnya's sovereignty, President Yeltsin has signed a decree allowing for a permanent Russian military presence in Chechnya. This has angered the Chechens and breaches of the ceasefire have been reported.