Yeltsin signs peace pact with Chechnya

In remarks which owe more to wishful thinking than anything in the hard print before him, Boris Yeltsin yesterday forecast an end to 400 years of conflict between Russia and Chechnya, and sought to prove his point by signing a peace treaty with the tiny Caucasian republic.

In a move that will further enrage his hawkish opponents, the Russian President signed the agreement at a highly publicised ceremony in the Kremlin during his first meeting with Aslan Maskhadov since the former separatist commander was elected President of Chechnya.

The four-sentence document commits both sides to a formal rejection of the use or threat of force, but it did not settle the issue of Chechnya's status, which continues to be a fundamental source of tension. Although an earlier agreement to postpone a settlement for five years remains unaltered, the document contains a clause saying both sides will develop relations according to the "norms of international law", a phrase which the Chechens are certain to seize on as an endorsement for their claim for independence.

Crucially, the signing of the accord, after a dangerous period of unease in the tiny Caucasus republic, suggests both sides are moving close to an agreement over oil - one of the issues that contributed to the Kremlin's decision to sent in the troops in December 1994, resulting in the loss of some 80,000 lives and by far the worst blot on Mr Yeltsin's Kremlin record.

Russia is legally bound to be ready by October to take delivery of early Caspian oil from Azerbaijan, via a pipeline which runs north-westwards, through Chechnya, to the Black Sea port of Novorossiisk. The Chechen section, which runs south of Grozny, is partly wrecked, peppered with holes, and vulnerable to attack.

If the pipeline is not ready by the October deadline, Russia faces financial penalties. It would also have an even weaker case for arguing that the same route - as opposed to Western-favoured routes via Georgia and Turkey - should be used for the crucial main export pipeline which will eventually carry Caspian oil from Baku to markets in the West. Furthermore, Mr Maskhadov's government would lose sizeable income from transit tariffs - money which is desperately needed to rebuild the republic's infrastructure after a war that flattened its capital city, Grozny.

In a glimpse of the hard bargaining now under way, the head of Chechnya's oil company yesterday said the Chechen section of the pipeline could be completed within a month if someone - presumably Russia - came up with $2m (pounds 1.2m).

Exactly how much weight yesterday's treaty will ultimately carry will depend on a multitude of factors. The mere sight of Mr Yeltsin sharing a platform with Mr Maskhadov, complete with his lambskin hat, will deepen the outrage already felt by hardliners in Russia who oppose the peace deal.

Those hardliners stand accused by the Chechen leadership of being to blame for trying to destroy peace in the region - most recently, by staging bombings at railway stations in southern Russia; if this is true, then yesterday's events could trigger further disruption which could undermine the treaty.

But there are also considerable doubts over the ability of the Chechen authorities to maintain order in their own territory. Armed bands of kidnappers have been been seizing journalists, and demanding six-figure ransoms. Last night, seven Russians were being held hostage in the region, including one of the country's best-known female correspondents, the NTV journalist Yelena Masyuk.