Russian forces were regrouping their forces in the east of Chechnya and preparing for an offensive on Grozny, a spokesman at the military press in Dagestan said, the Interfax news agency reported.

Russian warplanes continued to bomb suspected rebel bases and intensified strikes in the Argun Gorge southeast of Grozny where militants were believed to be moving southward toward Georgia, Interfax said.

Russian soldiers moved into Gudermes on Friday and launched a methodic house-by-house search for militants. On Saturday, military officials claimed control of the city, hoisting a Russian flag in a central square and playingnational anthem.

Russian commanders held a rally in the city centre late Saturday and promised residents electricity within days, and soldiers began delivering food and humanitarian aid. Interior ministry commander Col Gennady Fomenko said the takeover went smoothly, though Russian news reports said two servicemen were killed when their truck hit a mine.