ASSAULT AT HIGH NOON

By John Kohan/Moscow

Charred buildings and streets littered with bloody corpses. Gunfire and exploding shells. Civilian hostages huddled together in fear. These sights and sounds have become such standard fare on Russia's TV news shows in the six months since Moscow invaded the breakaway region of Chechnya that most Russians have grown complacent, believing the horrors of the Chechen war to be far removed from their daily lives. Few, in fact, paid serious attention to repeated threats by rebel leader Jokhar Dudayev to spread the conflict beyond Chechnya's borders. Then last week the Chechens finally made good on that vengeful promise. Suddenly the horrible images on TV were coming not from Chechnya but from a city in Russia itself. By week's end the entire nation was in shock, as hundreds, perhaps thousands, of Russian hostages were under threat of death.

In a terrorist raid unprecedented since the Russian civil war of the 1920s, more than 80 Chechens crossed into the neighboring Stavropol territory, concealed in trucks supposedly transporting coffins from the war zone, to launch a daring assault at high noon on the city of Budyonnovsk (pop. 100,000), some 70 miles from the Chechen border. Splitting into squads of five and six, the gunmen -- armed with automatic rifles, machine guns and grenade launchers -- fanned out across the city, joining up, according to Russian security officials, with rebels already in place.

After a battle with badly overmatched local police in which at least 20 officers were killed, the invaders occupied the Budyonnovsk town hall for almost two hours and hoisted the green, white and red Chechen flag in a mocking show of victory. Then the raiding party torched houses, set cars aflame, randomly sprayed passersby with bullets and pulled passengers off buses. Finally they retreated to the city hospital, taking hundreds of civilian hostages as a shield against hastily dispatched Russian special forces. The raiders "drove over people; they shot peaceful civilians in cold blood," reported Deputy Interior Minister Yevgeni Abramov. "What they are doing cannot be described as the behavior of human beings."

The Chechen terror team issued a chilling ultimatum to the Russians: either begin the immediate withdrawal of troops from Chechnya or face a bloodbath. As government forces kept a tense vigil outside the hospital, stories quickly spread that to discourage rescue attempts the terrorists had mined the building and splashed gasoline on the hostages-numbering by some estimates close to 2,000. Ratcheting up the war of nerves, Shamil Basayev, a top rebel commander and leader of the operation, told journalists at a hastily improvised press conference: "It does not matter to us when we die. If necessary, we will shoot the hostages."

The raid came at a particularly embarrassing moment for the Kremlin. Only hours before the assault began, Prime Minister Victor Chernomyrdin had claimed that the government had taken measures to prevent terrorist attacks on Russian territory. With security tightened throughout Russia against more Chechen terror, President Boris Yeltsin immediately vowed to do everything possible to free the hostages, denouncing the attack as "unprecedented in cynicism and cruelty." In reality, the Kremlin had few options. It was certainly not prepared to negotiate an end to the Chechen war under such conditions, making a show of force inevitable.

At dawn on Saturday, government forces stormed the hospital compound. After a four-hour fire fight, the troops seized the ground floor of the main building but encountered heavy resistance from the terrorists, who held most of the hostages on the top floors. Women holding white sheets were pushed to the windows as targets. Both sides agreed to a cease-fire, and 227 hostages were freed; but shooting resumed again after five hours. When a second Russian attempt to storm the hospital failed, an uneasy stalemate settled in. Chernomyrdin moved to break the deadlock by calling rebel leader Basayev directly by telephone at the hospital to discuss conditions for the release of the hostages, including a cease-fire in the Chechen war. Yeltsin meanwhile had gone to Halifax, Nova Scotia, where the summit of the seven leading economic powers was being held. After meeting with Yeltsin, the seven condemned violence on both sides of the Chechen conflict.

The events in Budyonnovsk overshadowed good news last week for the Kremlin from the Chechen front. Russian forces seized the strategic villages of Shatoi and Nojai-Yurt, the last two major strongholds of Dudayev's forces. But the surprise Chechen raid on Russian territory signaled that for desperate fighters like Basayev, who has lost his wife and almost all his family in the war, the grudge match with Moscow is far from over. In fact, Budyonnovsk may be the opening skirmish in a new guerrilla war, waged on the streets of towns and cities across Russia.

--With reporting by Dean Fischer/Washington and Yuri Zarakhovich/Moscow

With reporting by DEAN FISCHER/WASHINGTON AND YURI ZARAKHOVICH/MOSCOW