The BBC's Andrew Harding: "This new conflict has sent a chill through Russia"

It said four Russian soldiers were also killed and 13 wounded as helicopter gunships carried out strikes on the separatists' positions.

But the rebels, who have declared independence in Dagestan, said they had killed 18 soldiers.

Russian troops are pouring into Dagestan

The Interior Ministry said the insurgents were making "hysterical" appeals for reinforcements "at any price".

But BBC Moscow Correspondent Robert Parsons said there was little sign the rebels were weakening despite a week of constant aerial and artillery bombardment.

Soldiers on the ground admitted the situation was tense and that the rebels, who are familiar with the mountain terrain, were blocking roads and ambushing Russian troops.

Russia, which says it has proof that the rebels are receiving outside help, has issued a warning to foreign governments considering whether to offer support.

In a letter to the United Nations and a number of Islamic states, the Foreign Minister Igor Ivanov, said Moscow would view any such assistance as blatant interference in its domestic affairs.

'We'll strike militants everywhere'

Russia's acting Prime Minister Vladimir Putin announced a major offensive on Friday to dislodge more than 1,000 Muslim fighters from mountainous territory near the Chechen border.

He also authorised his forces to destroy rebel bases in Chechnya, where many of the rebels are believed to come from.

"Chechnya is Russian territory and we will strike at militants wherever they are located," he said.

The fighting in Dagestan is the biggest challenge to Russian authority in the turbulent region since the Chechen war which left an estimated 80,000 people dead.

Chenchnya, which is technically still part of Russia, has had effective independence since the end of the war in 1996.

(Click here to see a map of the region)

General Viktor Kazantsev, who heads the North Caucasus military region, predicted the operation to recapture zones occupied by the Islamists for the past week would be over in two days.

The BBC's Robert Parsons: The Russian Government seems confused

The Interior Ministry's spokesman in Dagestan said intercepted radio conversations showed the insurgents were incurring great losses and running out of ammunition.

''One can hear them making various hysterical appeals for people to come to their assistance at any price, in the name of Allah,'' he added.

Thousands of villagers have fled the fighting

The ministry said fighting was intense around the villages of Gagatly and Rikvany in the south-western Botlikh district, where the soldiers were killed.

The prime minister has ordered pay rises of between 70% and 170% for the soldiers in Dagestan because of the risk to their lives.

Mr Putin, who was only appointed acting prime minister this week, met political party leaders on Saturday to discuss the situation.

Moscow Mayor Yuriy Luzhkov said Russia "should use force, power and determination'' to resolve the crisis. He said the situation was ''completely different'' from Chechnya and most Dagestanis did not support the rebels.

Refugees

Muslim leaders in Dagestan have accused the rebels of being traitors to the cause of Islam.

In television broadcasts they said the rebels, who belong to the minority Wahabbi sect, were stained with blood and wanted to use Islam and the hardships of the people to seize power.

More than 6,000 refugees have fled the fighting, moving towards the Caspian Sea on the republic's eastern shore.

Chechen warlord Shamil Basayev is commanding the rebel forces

The Interior Ministry said militants were in control of about seven villages.

Russia has admitted losing three helicopters and 14 soldiers with another 40 wounded since the start of fighting.

On Friday, Russian television said 200 militants had been killed, 1,500 wounded and six captured.

But the Chechen commander leading the rebels, Shamil Basayev, said they had suffered hardly any losses and were finding it unexpectedly easy to beat the Russians.

The Islamic militant fighters declared the independence of an Islamic Dagestan and proclaimed a holy war against Russia last Tuesday.

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