New clashes in Chechnya mar Yeltsin's return

President Boris Yeltsin yesterday appointed a new head of Russia's domestic intelligence service and discussed the make-up of his next government, but a breakdown of the truce in Chechnya dashed his hopes of a smooth start to his second term in office.

In the worst fighting since the ceasefire was agreed on 10 June, only days before the first round of Russia's presidential election, six Russian soldiers were reported killed in a battle with rebels near Gekhi in south- western Chechnya.

The deputy commander of Russian troops, General Vladi-mir Shamanov, said the operation to smash a rebel force entrenched in Gekhi had involved the use of aircraft, artillery and interior ministry troops. Tensions were heightened by a rebel threat to execute Russian prisoners if civilians came under attack, and by an army warning to the rebels to release all captives or face being wiped out.

Under the terms of last month's truce, which appeared to be timed to assist Mr Yeltsin's chances of re-election, the Russian army is due to leave Chechnya by September in return for the demilitarisation of the rebels. But rebel commanders said the latest clashes put the truce in danger of collapse.

They accused the Russian forces of launching 52 attacks on Chechen settlements since Monday evening, killing five people and wounding 18. About 30,000 people are believed to have been killed in Chechnya since Russian forces intervened in December 1994 to crush a drive for independence.

Unseen in public for two weeks but apparently still very much in control of Russia's fortunes, Mr Yeltsin issued a decree that named Nikolai Kovalyov, 47, as the chief of the Federal Security Service (FSB), the successor to the internal affairs wing of the former KGB. Mr Kovalyov, a career KGB officer, became deputy head of the service in 1994 and was its acting chief after the dismissal on 20 June of Mikhail Barsukov.

Mr Kovalyov has virtually no public profile but is officially said to have spent two years in Afghanistan, though it is unclear in what capacity. His previous duties also include responsibility for economic counter-intelligence - experience that may appeal to the new national security supremo, Alexander Lebed, who has promised a crackdown on crime and corruption. Mr Lebed conferred separately on Monday with Mr Yeltsin and the Prime Minister, Viktor Chernomyrdin, but there is no firm evidence he had a hand in Mr Kovalyov's appointment. However, he said publicly on Saturday that the appointments of the "power ministers" - those in charge of defence, interior and security affairs - should be co-ordinated with him.

Mr Chernomyrdin, who has made clear his view that Mr Lebed should restrain his undisguised ambitions for power, met Mr Yeltsin yesterday to discuss the formation of the next government. The main interest centres on how reformist a complexion the government will have in the light of Mr Yeltsin's crushing election victory last week over the Communist candidate, Gennady Zyuganov.

Mr Chernomyrdin, a moderate reformist who is certain to retain the premiership, held talks yesterday with Russia's leading liberal opposition politician, Grigory Yavlinsky, who was knocked out in the election's first round. Mr Yavlinsky has signalled his readiness to accept the post of first deputy prime minister in charge of the economy, but officials close to Mr Chernomyrdin said it was unlikely that he or any of his liberal colleagues in parliament would be offered government jobs.