The assault by at least five helicopter gunships on Serzhen-Yurt cast a pall over what President Bill Clinton had earlier declared a "win-win meeting" during which Russia made partial concessions on the sale of nuclear technology to Iran but gave no ground on the question of admitting its former Warsaw Pact satellites to Nato.
"There are no military hostilities under way in Chechnya right now," said Mr Yeltsin at a press conference in the Kremlin with Mr Clinton. "The armed forces are not involved there. Today, the Interior Ministry simply seizes weapons still in the hands of some small armed criminal groups." Saying Russia was engaged in "creative work" in Chechnya, he added: "I believe that soon we will have a normal situation there.''
The abnormality of what is now a 22-week-long war in the region has long caused unease abroad but had been pushed into the background by the hoop- la of VE Day celebrations on Tuesday and yesterday's summit. Mr Clinton expressed concern but did not challenge Mr Yeltsin's version of events, urging extension of a "ceasefire" scheduled to expire on 15 May but which has never really existed.
The gap between Mr Yeltsin's statement and reality underscores what is probably the White House's dominant concern in its dealings with Moscow: is Mr Yeltsin trying to mislead or is he himself being misled? Neither option offers much comfort as Russia and the US steer their relationship through what is probably the most serious turbulence since the Cold War ended. Complicating their contacts is the fact that Mr Yeltsin and Mr Clinton, both up for re-election next year, face pressure at home from conservatives demanding a more robust posture.
White House officials cast what they described as a largely unscripted, and therefore risky, summit as a "modest success" exceeding fearful initial expectations. Mr Yeltsin said three hours of talks had proved pre-summit talk of crisis wrong: "Of course, even after the summit a number of issues have not disappeared. But the important thing is that we seek to address these problems.''
Washington does seem to have extracted some concessions on Moscow's contract to supply Iran with nuclear technology. Russia is scrapping plans to sell it a gas centrifuge plant that could be used to enrich uranium into weapons- grade material. It also agreed to submit the sale of two reactors to review by a joint commission.
"As far as the military part is concerned - nuclear fuel, centrifuge - we decided to exclude these questions; that means the military part falls away and only the peaceful part remains," said Mr Yeltsin. "There has been real progress on the Iran front," said the US Secretary of State, Warren Christopher.
But the deal is clouded by confusion. Parts of the Russian government had insisted there was never any plan to sell centrifuges, while other officials said such a deal was in hand.
More nettlesome is Nato's expansion into former Warsaw Pact countries. "Today we better understand the interests and concerns of each other and yet we still don't have answers to a number of questions - our positions even remain unchanged," said Mr Yeltsin. Mr Clinton said Russia intended to take part in the Partnership for Peace (PFP), a system of security co-operation envisaged by Washington as a half-way house towards the binding mutual security commitments of Nato. Russia was scheduled to sign up last December but backed out. Mr Yeltsin made no mention of signing up any time soon and made clear Russia objected to East European states making any attempt to move beyond PFP and become full Nato members and thus be guaranteed protection by the West.
The Chechnya conflict has increased the desire of former Soviet satellites, particularly Hungary, Poland and the Czech Republic, to become full members. It has also complicated another unresolved issue discussed by the two presidents. Russia has demanded revision of a treaty signed four years ago fixing limits on conventional forces in Europe. It has already violated the pact, with 600 tanks in the north Caucasus instead of 150 as agreed. Mr Clinton said "some modifications" might be in order when the treaty is reviewed next year. Mr Yeltsin said: "Every meeting of Russian and US presidents sparks unfounded talk about contradictions ... even a crisis in relations. The result of these Moscow talks disproves this speculation."
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