Russia's acting prime minister, Mr Vladimir Putin, one day into his job, vowed yesterday to restore "order and discipline" in Dagestan, where Islamic militants proclaimed the independence of the republic a few days after capturing villages there.
Mr Putin, plucked to head the government on Monday, told his first cabinet meeting he was giving top priority to resolving the latest crisis in Russia's strife-torn northern Caucasus.
"We are facing the emergence of mass terror on Russia's southern border," Mr Putin said after meeting President Boris Yeltsin.
Mr Putin, a former head of Russia's domestic security services, said: "The situation in Dagestan will return to normal within a week and a half to two weeks."
But as Mr Putin spoke, a group of Islamic leaders declared independence for Dagestan, in a move chillingly reminiscent of events leading to Moscow's futile 1994 bid to prevent neighbouring Chechnya from breaking away.
The Russian invasion triggered a bloodbath that dragged on until 1996, leaving 80,000 dead on both sides and leaving Chechnya with de facto independence and the Caucasus with chronic instability.
The Dagestani independence declaration was issued at a secret meeting of the Shura - a Moslem council with no recognition from Moscow - held in a mountainous area seized by hundreds of fighters who crossed from Chechnya at the weekend.
"We, the Moslems of Dagestan, officially declare the restoration of independence to the Islamic state of Dagestan," the official text of the declaration said.
It further calls on all Muslims to help the republic rid itself of "occupants" from Russia.
According to Moscow media reports, the fighters yesterday left the Dagestani region of Tsumadin and headed for the nearby region of Botlikh.
The Chechen insurgents are thought to be members of the Wahabi sect seeking to install Islamic law in Dagestan.
Late yesterday the speaker of Dagestan's parliament Mr Mukhu Aliev called for "all means" to be put in place to combat the rebels.
"If the federal authorities do not take measures, we will fight (the rebels) ourselves," he said.
He also dismissed the declaration of independence as no more than a statement to the media.
"The fighters' goal is not war against Dagestan but war against Russia," he said, asserting that "more than 90 per cent" of the people in Dagestan wanted to remain part of Russia.
In Washington, State Department spokesman Mr James Rubin said the United States was watching the situation closely and was extremely concerned by reports of civilian casualties.
"We view with concern the marked increase of violent clashes in the region of Chechnya in the past month and condemn this action by armed groups from Chechnya against lawful authority and innocent civilians which has resulted in lost of life and is displacing families from their homes," he told reporters.
Mr Rubin said the United States did not recognise the independence declaration. "We recognise the territorial integrity of the Russian Federation," he said.
Police in Moscow and other major Russian cities have increased security and five Russian soldiers have been confirmed killed in the past four days of violence.
The unrest brought a swift response from the Kremlin, where Mr Yeltsin huddled with Mr Putin and top security advisers just a day after unexpectedly sacking his government.
As he tackled Russia's latest security crisis, Mr Putin said he will keep Defence Minister, Mr Igor Sergeyev, and Interior Minister, Mr Vladimir Rushailo, in his new cabinet.