Grozny rebels braced for final assault CHECHNYA: Power struggle among the top brass approches its climax as Russia's r ickety military machine moves up a gear

Chechen rebels holed up in the basement of a bomb-ravaged presidential palace in Grozny were last night braced for an overwhelming assault by Russian forces, after a day of incessant shelling.

The barrage, so fierce that the centre of the city reverberated with what at times seemed like a single, sustained explosion, started with the formal end of two-day ceasefire declared by Moscow on Tuesday but rarely observed by either side. A large column of Russian tanks thundered towards Grozny to the west; Itar-Tass news agency said seven transport planes carrying marines were on their way to the region from the Pacific port of Vladivostok.

Also sent to Chechnya are troops from the elite Interior Ministry Dzerzhinsky division, normally entrusted with public order in Moscow.

A Chechen commander in the beleaguered Grozny bunker that has become the focus of Russia's escalating military campaign said the presidential palace was preparing for decisive onslaught. A separate report by the agency said the final strike was likely today or tomorrow.

But the apparently imminent capture of the symbolic heart of Chechnya's three-year-old secessionist rebellion has done nothing to calm bitter opposition to the war among senior Russian soldiers or clear a fog of confusion and in-fighting in the Kremlin.

There were also rumblings of dissent among marine units ordered to Chechnya. The commander of a Vladivostok battalion risks court martial after refusing to send his men to Chechnya.

In the first official casualty figures for a week, Moscow yesterday said that 394 Russians soldiers had been killed and more than 1,000 wounded. The position of Pavel Grachev looks increasingly untenable. President Boris Yeltsin seems to be moving away from his Defence Minister and other early champions of the Chechen campaign in a desperate scramble to salvage his own crumbling credibility.

Aggravating the power struggle is the mounting financial cost of operation. Mikhail Zadornov, chairman of the State Duma's budget committee, said the war would cost at least $1.2 bn. "The draft 1995 budget will be nonsense if it does not reflect expensesfor military operations."

Despite bitter fighting in Grozny, a Kremlin aide, Mark Urnov, insisted that there had been an "absolute shift of emphasis from military to political methods to resolve the Chechen crisis".

The real shift, however, seems to be one of power, with Mr Yeltsin moving away from Mr Grachev and other so-called "power ministers" towards less hawkish figures, such as Viktor Chernomyrdin, the Prime Minister, and the heads of Russia's two houses of parliament, Ivan Rybkin and Vladimir Shumeiko. The last two were elevated earlier this week to the rank of "permanent members" of the Kremlin's Security Council, while the authors and defenders of the Chechen debacle - the ministers of Defence, Interior and Counter-Intelligence - were left as simple members.

nRussia's first deputy Prime Minister, Oleg Soskovets, yesterday denied a newspaper report that a drinking binge with Mr Grachev resulted in the first disastrous attempt to take Grozny, Reuter reports.

Izvestia said Mr Soskovets had flown with an unnamed general to headquarters in Mozdok to spend new year's eve with Mr Grachev, and the three men had drunk heavily during celebrations.

"The front-line units then received the command - whoever took the presidential palace would receive three Hero of Russia awards," said Izvestia.