Rebel forces in Chechnya are reported to be striking heavy blows against Russian forces as fighting continues in and around the capital, Grozny.

Some 300 Chechen rebels are reported to have surrounded Russian troops in Argun, confining them to the area around the railway station and the military headquarters, the Russian news agency Interfax quoted Russian military sources as saying.

It was the first Russian confirmation that their forces were in difficulty in Argun, which is 15km (nine miles) east of Grozny.

Chechen forces also launched a surprise attack on the Russian-held town of Shali, 25km (16 miles) south-east of Grozny, soon after dawn on Sunday. A spokesman for the rebels said they had quickly seized half the town in fierce fighting, before withdrawing again.

Russia's Interfax news agency said Russian armoured vehicles had since made their way back into the town.

In a contradictory statement, a spokesman for the Chechen president said the Chechen flag was flying over local government buildings in Shali, and Russian forces had retreated without resistance.

Interfax quoted Russian military sources as saying Chechen fighters attacked a Russian field base in the town of Gudermes, in eastern Chechnya, on Sunday.

The Russian military was also quoted by Interfax as saying a convoy of interior ministry troops taking supplies to troops in Dzhalka, north-east of Grozny, had been ambushed by Chechen rebels.

The BBC's William Horsley, reporting from Moscow, says the assaults demonstrate the rebels' ability to strike behind Russian lines. He says many similar clashes are reported to be going on in the war zone south of Grozny.

No let-up in fighting

Russian officers say there has been heavy shelling of suspected rebel positions in Grozny, and despite thick fog, some units are reported to be trying to fight their way street by street into the city centre.

Russia's acting president, Vladimir Putin, had said the bombardment of Grozny would be suspended during a weekend of religious holidays for the sake of the thousands of civilians still trapped there.

But apart from a pause to allow an exchange of bodies with the Chechen fighters, there has been little respite.

Speculation is meanwhile growing that Russian forces are regrouping for a new offensive on Grozny.

There are reports of Russian reinforcements moving towards the capital from the east.

Russian warplanes have flown more than 70 sorties in the last 24 hours.

Elsewhere, reinforcements have been seen moving into the mountains around Vedeno, a large rebel stronghold further away from the capital.

But our correspondent says there are indications that heavy armour and air power are largely ineffective against the mobile Chechen guerrillas.

Russian casualties

Russian soldiers have given unprecedented interviews to the media about the heavy casualties they are suffering at the front.

They described truck-loads of dead and injured coming back across the border.

Troops in Grozny itself spoke of being attacked with rockets, guns and poison gas.

Russia admits that about 500 of its troops have been killed, but many frontline soldiers speak of the Chechens keeping up a fierce counter-attack with machine guns and mortars, and say the real number of Russian dead is much higher.

Russia has so far ignored all the West's warnings that relations will be damaged if the assault on Grozny goes on.

On Sunday, UK Foreign Secretary Robin Cook again voiced the West's disquiet over the plight of civilians caught in the conflict.

"We have asked the Russians to halt this military offensive which hits civilians."

Islamic militants

Russia launched its military campaign in September after blaming a series of deadly apartment bombings in Russia on Chechnya-based Islamic militants.

The ground assault on Grozny started in earnest on Christmas Day after a sustained air attack aimed at weakening the city's defences. Russian officials widely predicted the battle for the capital would be a short one.

But Russian troops have become bogged down in bitter street fighting, raising fears of a repeat of their defeat in the same city in 1996.