The signs that Russia was pulling back from the brink came after the West warned of economic and diplomatic sanctions against Moscow for its threat to storm Grozny at the weekend. The Chechnya conflict is expected to dominate today's European Union summit in Helsinki.
The commander of Russian Interior Ministry troops, General Vyacheslav Ovchinnikov, told journalists that the Russians may now limit their intervention against Grozny to a blockade. He said: "The guerrillas will not be able to hold out long without light, heat or food ... There is nothing to capture in a blockaded city."
Russia has gradually softened its ultimatum to the 100,000 people in Grozny, including the elderly and infirm, that they had until Saturday to leave the city or face extermination.
General Ovchinnikov estimated that the guerrillas have 4,000 men in Grozny and 5,500 to 6,000 in the mountains.
Speaking in Peking, President Yeltsin furiously rejected Bill Clinton's warning this week that Russia would pay a high price for the Chechen war.
"It seems Mr Clinton has forgotten Russia is a great power that possesses a nuclear arsenal," Mr Yeltsin grumbled.
Mr Clinton responded: "I haven't forgotten that. You know, I didn't think he'd forgotten America was a great power when he disagreed with what I did in Kosovo."
The Russian Prime Minister, Vladimir Putin, hastened to head off any tension with the West over President Yeltsin's outburst. "We have very good relations with the United States," he insisted in Moscow.
He said he understood that Mr Clinton's comments were dictated by concern, but he thought Washington lacked knowledge about the situation in the Caucasus.
It would be "wrong to speak of a cooling of relations" between Russia and the US, he said, while adding that nuclear weapons had always been, were and would always be part of Russia's defence arsenal.
Mr Yeltsin yesterday secured Chinese support for the Chechnya campaign.
A Chinese Foreign Ministry spokeswoman said China "understands and supports the efforts made by Russia in safeguarding national unity and territorial integrity".
China is concerned about any international interference in domestic matters, which Peking fears could also be applied to Taiwan and Tibet.
Commentators said it remained to be seen whether Russia was seriously reorienting itself towards the East or whether Moscow was merely sabre- rattling. Mr Yeltsin's theatrical performance could have been largely for domestic consumption in Russia.