Soviets Move to Forge an EC-Style Common Market : Kremlin crisis: Russian official says even the Baltics are striving to maintain economic ties. But turmoil continues with protests in Georgia and Azerbaijan.

Despite the secession of the three Baltic states from the Soviet Union and moves toward independence by other republics, Russian Federation Prime Minister Ivan S. Silayev said Saturday that they will quickly pull together again to form a common market similar to the European Community.

Silayev, who heads the country’s new economic commission, said that even as Estonia, Latvia and Lithuania sever the political relationship with the Soviet Union, they are striving to maintain their economic ties with Russia and the other republics.

Negotiations are under way, Silayev said, to maintain the country’s “common economic space,” preserving ties between suppliers and their customers but without the old domination of the central government and its bureaucracy.

“We believe we will have an arrangement similar to what you have now,” he said, referring to the European Community in a talk to an audience made up mostly of Western Europeans.

Yet, political turmoil in the country’s outlying republics continued Saturday with protests in both Georgia and Azerbaijan against local leaders over what critics charged was their support of the conservative coup d’etat last month.

In the Georgian capital of Tbilisi, fights broke out between supporters and opponents of President Zviad Gamsakhurdia after rallies Saturday afternoon.

He is accused by opposition parties of taking advantage of the state of emergency to act against them; he denies supporting the coup and contends that his critics are working for the central government in Moscow, trying to destabilize the republic so that it does not win full independence.

In Baku, the Azerbaijani capital, the Azeri Popular Front continued its protests against today’s election in which President Ayaz Mutalibov, the former Communist Party leader there, is the only candidate on the ballot.

At the time of the coup, Mutalibov was quoted by Azerbaijani and Iranian news media as supporting the state of emergency as a necessary step because of the country’s political and economic crisis; when the coup failed, he denied making the statement.

Silayev, speaking here to an audience of Western business leaders and economists, contended that economic ties developed over decades will survive the disintegration of the Soviet Union’s old structure as a state and actually thrive as free-market forces replace central planning and government management.

Russian President Boris N. Yeltsin also argued Saturday for the formation of a new union of the Soviet republics with various forms of voluntary association, ranging from federation to only economic cooperation.

With perhaps 70% of the Soviet Union’s gross national product and 60% of its territory, Russia could easily go it alone, Yeltsin said, but wants to restructure rather than destroy the union.

“We want Russia to consolidate the other republics and the union to be preserved,” Yeltsin said in an interview with European and Japanese television networks, but not “within the strict regime and strict framework” of a federation with a strong central government that had been envisioned earlier.

Russia would support a structure that allows each republic to affiliate as it wishes, Yeltsin said, in an effort to preserve some form of union among the republics.

“If the Ukraine wishes to be in confederation, let it be,” he continued. “If Russia wants to be a member in a federation, let it be. If some of the republics, Moldova or others, want to be associate members, it is also possible. And if the Baltic republics want to participate only in the economic treaty or simply sign economic agreements, we must also welcome this. We must not lose the union because of the diversity of political systems.”

East European countries that had belonged to Comecon, the socialist trading bloc, might also join, Silayev told the meeting of the World Economic Forum here, for many of their customers are in Russia and the other Soviet republics.

But he acknowledged that most of these countries are looking primarily to the West--in fact, to the European Community itself--for trade.

Eduard A. Shevardnadze, the former Soviet foreign minister, also called for the development of the common market whatever political course the republics follow.

“Further development of the common economic space will be something in which all republics, all sovereign states, will be interested,” Shevardnadze told the World Economic Forum. “They will not be able to break the ties that have existed all these years.”

Shevardnadze, who resigned in December with a warning against a conservative takeover of the government, said that the danger from reactionaries remains, that their defeat is not yet final.

Popular discontent could surge this winter as the result of severe shortages of food and fuel, Shevardnadze said, and this would be exploited by opponents of democracy.

“People could take to the streets spontaneously,” he said. “No one could predict the outcome.”

Tensions continued to bubble Saturday in several regions of the southern Soviet Union.

In the Georgian capital, Tbilisi, members of a U.S. congressional delegation on a human rights fact-finding tour, watched fistfights in the streets between groups loyal to Gamsakhurdia and those accusing him of dictatorial rule and demanding his resignation.

The fighting took place away from large rival protests that brought an estimated 20,000 to 30,000 into the capital’s city center.

Anti-government demonstrators demanded an emergency parliamentary session to investigate both Gamsakhurdia’s actions during the coup attempt in Moscow and also alleged police attacks against those attending an anti-government rally earlier last week.

“If they fail to get such a session in the short term, they will campaign for a referendum on the same issue,” predicted Valerian Khukhunashvili, spokesman at the Georgian mission in Moscow.

Gamsakhurdia was the first non-Baltic leader to declare his republic independent of the Soviet Union, but so far, Moscow has not responded.

Akaki Asatiani, the chairman of the Georgian Parliament, who had stormed out of a meeting Friday in Moscow of the union’s newly constituted collective executive, the State Council, declared Saturday that Georgia will break “all official relations with the Soviet Union” after the council decided not to take up Georgia’s declaration despite granting independence to the three Baltic states.

Asatiani, speaking in Moscow, said Georgia will refuse to sign an economic treaty with other republics and that a defense treaty is “out of the question.” Asatiani had attended the meeting as an observer.

“Soviet troops in the republic must be considered foreign, if not occupation, forces,” he said.

Speaking to a rally of between 5,000 and 10,000 supporters Saturday in front of the republic’s main government office building in Tbilisi, Gamsakhurdia ignored protests against him and instead appealed to powerful nationalist sentiments in the republic.

“The infirm machinery of the Kremlin will not prevent us from becoming free,” the Associated Press quoted him as saying.

The news agency said members of the U.S. congressional delegation voiced doubts about an international willingness to recognize the present Georgian government in the light of its dubious human rights record.

While protests went off without major violence in Tbilisi, at least two people were killed and several others injured in clashes 60 miles north in the town of Tskhinvali, the provincial capital of the South Ossetia autonomous region.

The fighting took place between pro-independence Georgians and Ossetians, who have rejected the declaration and want to retain strong links with other Ossetian communities farther north in the Russian Federation.

“Intensive exchanges of fire with the use of large-caliber machine guns, grenade launchers and missiles took place,” the Soviet news agency Tass reported.

In the predominantly Muslim republic of Azerbaijan, a last-minute conciliatory appeal to political opponents by Mutalibov, the president, failed to ease tension on the eve of an election he has insisted on holding despite resistance to the fact that he is the lone candidate.

“I want to get your votes, your faith, your trust,” he said in a message aimed at his opponents.

Mutalibov is a highly controversial figure who presided over the republic as the head of the Azerbaijani Communist Party and has been accused by his opponents of sympathizing with those involved in last month’s coup against Gorbachev.

Last week, he quit the party as the Azerbaijani Parliament proclaimed the republic’s independence.

Mutalibov’s swift turnabout, coupled with widespread suspicion of vote-rigging, led the rival candidate, Social Democratic Party leader Zardusht Ali-Zade, to withdraw from the race and demand the election’s postponement. Following a Friday rally of about 50,000 in the capital, Baku, demanding that the election be canceled, Mutalibov’s political opponents worked Saturday to organize a boycott.

“We have called for people to come (to the city center) tomorrow with their election registration cards so we can collect them and know how many people did not take part in the presidential election,” said Abulfaz Aliyev, leader of the Azeri People’s Front, opposing Mutalibov. “We will also gather signatures with their addresses to prove they didn’t vote.”

He said that half of the republic’s factories had gone on strike in support of those opposing the election.

There were also disturbances reported in Moldova, where anti-independence protesters continued to block railroad lines in the republic’s eastern Dniester region.

Latest Developments

The major stories: * SOVIET WISH LIST: As all disintegrates about them, Soviet officials continue to hope that a framework like the European Community can still emerge to hold things together. But the breakup continues. The southern republic of Georgia, which has already voted to secede, declared that it is breaking off relations with Moscow because the new government has failed to recognize its independence. * ESTONIAN QUANDARY: The congress of the breakaway Baltic republic of Estonia faces a tough question in its first post-independence session: What is an Estonian citizen? * PENTAGON PUZZLER: U.S. military intelligence analysts are scrambling to discern the shape of the military force that will emerge from the political chaos in the Kremlin.