Sunday 27.10.2002, CET 01:23 October 26, 2002 6:30 PM

By Jon Boyle

MOSCOW (Reuters) - The dramatic end to the Moscow theatre siege could enhance President Vladimir Putin's tough reputation among Russian voters and extinguish any hopes of a negotiated end to the long and brutal war in breakaway Chechnya.

The seizure of a packed Moscow theatre on Wednesday night by a "suicide squad" of 40 Chechen guerrillas was a crushing humiliation for a man whose meteoric rise to the Kremlin from obscurity was fuelled by his tough handling of Chechnya.

Although scores of hostages died when special forces stormed the Melnikov Street theatre in a pre-dawn raid on Saturday, there was tangible relief that more than 700 others were rescued.

Commentators hailed Putin's refusal to bow to guerrilla demands that Russian troops withdraw from Chechnya.

Rebel leader Aslan Maskhadov and his supporters "will soon wave the white flag" of surrender, crowed parliament speaker Gennady Seleznyov.

The head of the pro-Moscow administration in Chechnya, frequently the target of rebel gunmen, added: "This has been a good lesson to those terrorists and shows they will not go unpunished," the RIA news agency reported.

But it left the chances for peace in the southern frontier region seemingly as distant as ever after eight years of war.

"I see no change in Russian policy in Chechnya, maybe even it will be more tragic," said Pavel Felgenhauer, an independent political and military analyst. "The rebels will get more entrenched, that means there will be new terrorist attacks, maybe much bloodier than this one, maybe also in Moscow."

At the height of the siege on Friday night Putin went on national television to say he was willing to talk about the future of the breakaway province -- but only on his terms.

PUBLIC PERCEPTIONS

As the crisis dragged into its second day TV chat shows urged Putin to speak to the nation. A few dozen relatives desperate for the release of their loved ones held anti-war rallies in the capital in response to rebel demands.

Despite widespread fatigue with the conflict, their plea failed to find a wider echo among most Russians.

"It's especially sad because it happened just when the public mood was starting to change drastically", said Andrei Piontkovsky, director of Moscow's Centre for Political Studies.

"More than 60 percent of people were against the war and for political talks with (Chechen President Aslan) Maskhadov, according to polls. Now this process will be set back."

The public's perception was a "very psychological thing" and the final death toll would help determine whether the three-day saga was seen as major success or humiliation.

More than 40 hostages are seriously ill in hospital from the effects of a gas pumped into the theatre to incapacitate the guerrillas shortly before troops stormed the building.

WORSE TO FOLLOW

A senior aide to rebel leader Aslan Maskhadov, who is not recognised by Moscow, said the drama meant Moscow now faced a clear choice: talk to the gunmen or the man elected president of the breakaway North Caucasus republic in 1997.

"We warned earlier the situation would get out of control," Akhmed Zakayev, Maskhadov's personal envoy told Reuters.

"It is a good thing they did not take a nuclear power station. It could gave been a much worse catastrophe. We cannot guarantee something like this will not happen again", he told Reuters by phone from a conference in Denmark.

"There is no way out other than negotiations," he said. "If they do not want to speak to Maskhadov, they will have to speak to (Movsar) Barayev, and others like him", a reference to the guerrilla commander killed in Saturday's siege.

World leaders rushed to offer Putin support when the crisis broke and forced him to cancel overseas trips.

But if he thought Western criticism over Chechnya would now be even more muted, French Foreign Minister Dominique de Villepin will have given him a rude awakening.

"I believe one must distinguish between things: terrorism, which is reprehensible in all its forms and wherever it might be, and crises which genuinely call for the search for a political solution. This is clearly the case in Chechnya, we've said it for years," Villepin said on Europe 1 radio.

Few, however, expect Moscow to change its policies in the troublesome republic, which won de facto independence in 1996 when Moscow's humiliated forces quit.

Three years later Putin, then prime minister, sent back Russian troops back in October 1999, saying Chechnya had become a nest of international terrorism used to launch appartment bomb attacks that killed more than 300 Russian civilians.

The ensuing conflict, accompanied by widespread reports of atrocities and rights abuses by government troops against civilians only exacerbated the situation.

Reuters

-- Anonymous, October 26, 2002