Russians Strike at Heart of Chechnya’s Capital : Unrest: Shells rain down and the Parliament building burns, but leader of the rebel republic remains defiant.

Russian forces blasted their way into the center of Grozny on Saturday, invading Chechnya’s capital with tanks, setting its Parliament building ablaze and capturing key targets in a climactic New Year’s Eve assault on the rebel republic.

The besieged city is expected to fall to the vastly superior Russian forces that have been bombarding the oil-rich, separatist Muslim republic of 1.2 million people since Dec. 11.

Still, Chechen President Dzhokar M. Dudayev remained defiant.

As Russian forces attacked his capital with tanks, warplanes, helicopter gunships and artillery shells, crushing apartment buildings and setting a gasoline storage plant on fire, the former Soviet air force general issued a New Year’s address through Chechnya’s Foreign Ministry.

“Despite the entire might of the Russian army that is attacking Grozny, the Chechen people have already won a moral victory,” Dudayev declared.

The Chechen leader was believed to be hunkered down in the basement bunker of his presidential palace, across Freedom Square from the burning Parliament building. Russian human rights commissioner Sergei A. Kovalev, an opponent of his government’s resort to force, and a group of anti-war members of the Russian Parliament were reportedly in the bunker with Dudayev.

Although it was clear that the vastly outgunned Chechen commandos could not hold the city for long, they told journalists that they plan to leave for bases in the mountains to launch guerrilla attacks on the Russian occupiers they despise.

In the traditional Russian leader’s New Year’s Eve address to the nation, President Boris N. Yeltsin expressed hope that 1995 would be better than 1994.

“Not all of our country is at peace today,” Yeltsin said. “Perhaps that is why we feel its value and meaning especially sharply now.

“The most important task for me next year is to restore peace and normal life in the Chechen Republic, North Ossetia and Ingushetia,” the president said. “Then the refugees will be able to return to their homes. We shall spare no effort to achieve that.”

The Russian forces were clearly sparing no effort to bring a quick end to a war whose televised carnage has badly damaged Yeltsin’s popularity at home as well as his international image as a reformist post-Cold War leader.

Television footage from Grozny on Saturday showed flames pouring from some apartments; other buildings had gap-tooth black holes where once there had been living quarters.

An early morning Russian air strike apparently aimed at the strategic Karpinsky Hill overlooking the city missed its intended targets and smashed a residential neighborhood instead, according to reports reaching Khasavyurt, a town just over Chechnya’s border with the neighboring republic of Dagestan.

Agonized residents were seen pulling their dead and wounded out of the wreckage.

Russian troops were spotted on a rise 11 miles northeast of the city loading their guns with shell after shell and firing them off within seconds of each other.

In the afternoon, the Defense Ministry in Moscow issued a denial that the storming of Grozny was under way, and officials said that if anything, there would be a New Year’s Eve lull in the fighting. Dudayev had asked for a cease-fire beginning at 8 p.m. Saturday, but Moscow ignored the messages.

By evening, the government press service confirmed that Russian troops had penetrated the city, seizing many administrative buildings in the central city as well as the railroad station.

The Russians also said they had taken control of the burning Lenin oil refinery complex and would begin extinguishing the blaze that had smothered the city in black smoke for a third day. Chechens said the Russians had bombed the refinery again Saturday.

The Federal Counterintelligence Service, the successor to the KGB, insisted Saturday that Russia had not bombed the refinery, which is vital to Chechnya’s economic prospects. The agency asserted that the Chechens had dug trenches, filled them with oil and set them on fire to give the appearance that the refinery had been bombed and thus put Russia in a bad light. There was no word on whether the blaze had spread to a nearby ammonia tank, but no explosions or gas leaks were reported.

Russian Defense Ministry sources told Interfax that their troops were within shooting distance of the presidential palace but insisted that fighting had stopped for the night.

Chechen officials claimed that they had held off a Russian advance from the south, capturing 70 tanks and taking many Russian prisoners. They said some Russian units were retreating from the capital after suffering heavy casualties.

Both sides reported extremely heated battles in Petropavlovskaya on the northeast flank of the city. Other reports seemed to point to a Russian assault from two, or possibly three, sides.

Witnesses said the shells were pouring into Grozny from all directions, at a rate of several per minute.

There were also unconfirmed reports of street fighting near the main Republican Hospital, less than a mile from the presidential palace. Chechen officials told the Echo Moscow radio station that a Russian bomb had fallen on a prison in downtown Grozny, killing 26 inmates, but there was no independent confirmation.

The Russian press center announced that a portion of Chechnya’s stripped and blown-up railroad had already been repaired and railway service had been restored between the towns of Mozdok in North Ossetia and Ishcherskaya in Chechnya.

“This provides new possibilities for delivery of food and other essential cargo for the population of the Chechen Republic,” the press center said.

Russian officials said 2,200 tons of food, medicine and other aid have been delivered to Mozdok, but little of it has reached the tens of thousands of people who have fled the fighting.

Chechens see the Russian invasion as an attempt to crush their 3-year-old declaration of independence and recolonize their land. For his part, Yeltsin insists that no republic has the right to secede from Russia. In a speech to the nation last week, he described Chechnya as an outlaw republic that has become a haven for gangsters, hijackers, train robbers, gunrunners and drug traffickers.

The wording of government reports continues to cleave to this line. During the frenzy of bombing and shelling Saturday, the press center announced that Russian troops “are disarming illegal armed groups and restoring law and constitutional order in the city of Grozny.”

Goldberg reported from Khasavyurt and Efron from Moscow.