After the 1994-1996 uprising in the northern Caucasus, Russian authorities thought they had found a way to defuse tension in the region through their negotiated settlement with Chechnya. Part of the agreement was a de facto recognition of Chechnyan independence after five years. The Russians had reason to be optimistic. Chechnya is the only ethnically homogenous province. Chechens were deported under Joseph Stalin in the 1940s and due to subservient role given them in Russian societies, Chechens developed bitterness toward Russians and yearned for independence which they sought to achieve in the 1994-96 guerrilla rebellion. Other Caucasus provinces do not share similar sentiments nor the homogeneity of the Chechens.

But the Russian hope of Caucasian regional peace was recently upset by a guerrilla invasion of Daghestan, from Chenchnya. Representatives of a body called the Islamic Shura (council) of Daghestan appeared in the Chechen capital of Grozny and called on Chechens to support the struggle for "the liberation of the Islamic state of Daghestan from Russian occupation."

The guerrillas are understood to belong to the fundamentalist Wahhabi movement, but have failed to gather substantial support among Daghestan�s varied population. Moscow has accused Saudi Arabia and Afghanistan of funding the guerrillas. The guerrillas vowed to fight "Zionist" Russian president Boris Yeltsin, when separatists under the leadership of Chechen warlord Shamil Basayev seized villages in the Botlikh mountain district near Daghestan�s border with Chechnya.

Mr. Basayev led a raid on a Russian city of Budyionnovsk in 1995. He is considered a war hero by many Chechens. But he is also sought on terrorist charges in Russia. Other leaders of the guerrillas are reportedly from Jordan and Saudi Arabia and Abu Abdulla Djafar, believed to be of Pakistani origin. In the absence of independent media, news from the region is only obtained through the Russian official media and guerrilla media outlets.

The guerrillas declared Daghestan an "Islamic republic." But two weeks later, Aug. 24, the guerrillas announced a tactical withdrawal from their stronghold in Botlikh. By Aug. 25, Russian troops had regained control of all six mountain villages captured by the guerrillas in Daghestan�s Boltikh district in early August. The Russians declared the guerrilla withdrawal an evidence of defeat. But guerrilla leader Shamil Basayev announced his men were moving into "phase two" of their operations�the removal of "Zionist" influence in Daghestan.

In apparent frustration over the protracted conflict, Russian Prime Minister Vladimir Putin said Aug. 27 that his country will use everything in its arsenal against the "criminal gangs."

"The gangsters must know that we will use whatever is necessary to fight them," Mr. Putin told federal soldiers in Botlikh district of Daghestan, which has been a stronghold of the guerrillas.

On the same day, Chief of the General Staff Anatoly Kvashnin warned that the fight against the guerrillas was far from over.

"We know fully well that the bandits have plans to tear Daghestan away from Russia and expect them to change tactics in order to achieve their goals."

Unlike Chechnya, Daghestan is made up of more than 30 language and ethnic groups in the Caucasus mountains and steppes along the Caspian Sea, and has been the scene of increasing border violence with Chechnya in recent months.

Russia asked Chechen President Aslan Maskhadov to crack down on the guerrillas operating out of Chechnya, but he claimed that an invasion from Chechnya was being simulated to deceive the Russian and international community.

Mr. Mashhadov�s statement is of interest since the guerrilla withdrawal took place two weeks before a Russian ultimatum and at the same time as new Russian Prime Minister Vladimir Putin was sworn in.

The Daghestan crisis became a sort of litmus test for Russia�s strategy in North Caucasus, says Yegor Stroyev, chairman of the Federation Council, the upper house of the Russian parliament.

"Daghestan is only a litmus paper of the whole concept of the development of inter-ethnic relations in the North Caucasus," he said.

However, coupled with the serious outbreak of violence in Russia�s volatile north Caucasus region, the instability of the Russian government could become an ominous sign for the country�s nascent democratic institutions and worsen the situation of social and political rights.

"Russia�s military debacle in Chechnya effectively put an end to hopes of reviving the country�s imperial pride," said Georgi Derlugian, associate professor of sociology at Northwestern University in Evanston, Ill.

"Now�on the eve of crucial parliament and presidential elections�the crisis in the north Caucasus region could have barely predictable repercussions for Russian politics," argues Prof. Derlugian, who authored a book on Russia�s disastrous 1994-96 war with Chechnya.

However, it is understood that a long and inconclusive war�in Daghestan or Chechnya�can be used as a pretext to declare a state of emergency and thus cancel both parliamentary and presidential elections, due in December 1999 and mid-2000, respectively.

By law, Mr. Yeltsin must step down next year. But in that scenario Mr. Yeltsin�and his clique�have some chances to prolong their political life, postponing strategic decisions urgently needed in a country dealing with disintegration.