During his Caucasian tour on Wednesday, Russian premier Vladimir Putin had asserted that there would be no peace with President Aslan Mashkadov till he embraces Russian constitution. "Maskhadov has little or no legitimacy" since he was not elected under the Russian constitution, Putin said.

As Russian tanks and artillery took positions to fire point-blank at the provincial capital Grozny, the government defined certain conditions for initiating peace talks with Maskhadov or "any political forces which were ready".

Meanwhile, reports quoting Chechen officials said rocket attacks on an open air market, a maternity ward and other parts of Grozny on Friday left 118 dead and over 400 injured, many of them seriously. There was noindependent verification of the casualty.

Chechen officials claimed the rockets were fired by Russian forces moving into the city. The Russian defence ministry, however, denied the charge.

Grozny's central market was littered with shattered bodies, severed limbs and pools of blood after six rockets exploded amid stalls, which were crowded with shoppers, Chechen officials said. At least four other rockets slammed other parts of the city, including the one that hit a maternity ward killing 27 people, mostly women and newly-born babies, they said.

In a statement released late Thursday, as Putin was leaving for the crucial Russia-European Union meet in Helsinki, the government said Chechnya should respect the constitution of the Russian federation and its sovereignty and territorial integrity.

Grozny should also denounce terrorism, disarm illegal armed formations and handover to federal authorities persons guilty of terrorist acts, hostage taking and banditism. The provincial government must ensure humanrights and fundamental freedom and create conditions for safe return of people forced to leave their homes, it said.

The Russian government stressed that "all questions of political settlement of the situation in the Chechen republic must and will be resolved at the negotiations table. The way to this is open." The Russian government also confirmed that an earlier declared amnesty will be applicable to all militants who have not directly taken part in terrorist acts.