Russian Troops Storm Hospital Held by Chechens : Conflict: Assault halted after dozens killed or wounded. Rebels reportedly used hostages as shields. Some of the estimated 2,000 captives freed. Officials debate next move.

Russian troops today stormed a hospital where Chechen rebels had taken up to 2,000 people hostage, but the raid was called off after a ferocious battle in which dozens were killed or wounded, Russian officials said.

About 60 hostages were freed in the early minutes of the raid in this southern Russian city, but after nearly five hours of fighting the government halted the attack. Senior Russian officials were holding emergency talks on what to do next.

The heavily armed Russian commandos were backed up by military helicopters, armored personnel carriers and grenade launchers. Officials said the rebels repelled the attack with “barbarian tactics,” including using hostages as human shields as they fired on troops with automatic weapons.

Dozens of people were killed and injured on both sides, officials said, but they had no overall figures. Ambulances took wounded commandos and hostages from the hospital.

Russian officials talked to the gunmen by phone after the attack began. The rebels did release 25 pregnant women, but they refused to surrender. They have said they will not give up until Russia ends its war in the republic of Chechnya, which has been struggling to gain its independence.

The rebels would not give soldiers access to wounded kept in the hospital’s basement. Witnesses said from 15 to 50 people lay wounded around the hospital compound. Some of the freed women said many people in the hospital had been killed, but they said their captors did not shoot hostages.

Before today’s fighting, the official death toll in the siege of Budennovsk was 67, with unconfirmed reports putting it at 117.

The rebels had earlier said they are prepared to kill hostages and blow up the building if their demands were not met.

Interior Ministry officials confirmed a major assault on the hospital had been launched. Troops acted because it was vital to free the hundreds of hostages, including children, being held in the hospital, they said.

Russia news agencies said 60 of the hostages were freed, and other reports put the figure at 200.

Today’s fighting had not spread to other parts of Budennovsk, where residents who had been huddling in their houses came into the street to hear news of the battle and debate the government’s action.

“It’s all due to the negligence of our leaders,” said Valentina Lazareva, a 57-year-old retiree. “For half a year it’s been dragging on in Chechnya. Couldn’t they have stopped it from spreading over our border?”

“It was wrong to storm the hospital,” said a shirtless, barefoot man who identified himself only as Viktor. “Instead, they should have solved it peacefully.”

Lazareva disagreed. “Something has to be done to rescue them. They have nothing to eat there,” she said. “Maybe storming was the right thing to do.”

“Tell this idiot president of ours to come here,” Zinaida Azimanova, 52, said, criticizing President Boris N. Yeltsin for departing for the meeting of the Group of Seven industrialized nations in Canada while hundreds or thousands of his countrymen were held hostage. “He should stop these talks in Canada and come talk to these terrorists. The Chechens are spilling the blood of our innocent people.”

She said several girlfriends and her neighbor’s children are being held hostage in the hospital and demanded to know why has been relatively little international reaction. “Where are these blue helmets [U.N. peacekeepers]; where are all the international organizations?” she asked.

The battle followed a day of uncertainty and anger in Budennovsk, a town of 100,000 about 70 miles from the Chechen border.

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On Friday, as 31 bodies were unloaded from refrigerator trucks and carried past a sweaty, sobbing crowd into Bathhouse No. 1, the people of Budennovsk cursed the Chechen attackers and the man that they blamed for the Chechen war: Yeltsin.

“They should never have started this war,” said Svetlana Shakhsadova, 33, referring to the faraway Russian leadership in Moscow. “They should have shut our border tight against the Chechens and let them eat each other.”

The circle of women around her nodded, holding handkerchiefs over their noses to block the stench and to catch their tears. All had come to the bathhouse to scan the faces of the dead in hopes that their missing relatives would not be among them but would turn out to be among those being held at the hospital.

“Yeltsin should be watching this,” one woman shouted as grim-faced men dragged yet another corpse from the truck and a despairing young woman folded at the waist like a rag doll.

“No, he can’t see it; he’s gone to Canada,” another said. The crowd echoed angry agreement with opposition leaders in Moscow.

“He has shown the world that his own prestige is more important to him than the lives of his people,” a 19-year-old Russian soldier who gave only his first name, Alexei, said bitterly. “For someone who was planning to run for president, not in Canada but in Russia, it’s a suicidal step.”

Yeltsin suggested before his departure from Moscow that he was headed to the G-7 summit to persuade Western doubters that Russia’s military crackdown on Chechnya is a justified anti-terrorist action.

But his attempt to use the hostage crisis to persuade the West that war against the separatists is actually an anti-terrorist action appeared to backfire.

At a dinner meeting Friday night, the G-7 leaders expressed concern over the deadly confrontation in Budennovsk but warned Yeltsin that he must end the military crackdown against Chechnya if he wants to restore peace and security in the region, summit officials told reporters.

Russian Economics Minister Yevgeny G. Yasin briefed journalists on talks Yeltsin held with Canadian Prime Minister Jean Chretien but made no mention of the unfolding crisis back home.

On Friday, negotiations in Budennovsk had faltered between Russian authorities and guerrilla leader Shamil Basayev, a popular and charismatic Chechen field commander who has reportedly lost 11 family members during Russia’s six-month war to subdue secessionist Chechnya.

Basayev reportedly refused a Russian offer of an aircraft and safe passage for him and his estimated 50 or 60 men to any nation that would accept them.

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“The terrorists understand that they will have nowhere to retreat, and . . . they will not surrender,” Defense Minister Pavel S. Grachev said Friday. “Forcible actions are needed to liquidate these bandits and not allow the blood of hostages to be spilled.”

Grachev’s predictions were viewed with a certain skepticism here since he vowed seven months ago that Chechen secessionism would be crushed by one paratrooper division in a single afternoon. But his warning was echoed by Sergei V. Stepashin, head of the Federal Security Service, who told reporters: “We will do our best to avoid bloodshed--meaning we will do our best to protect the people if they start eliminating them.

“I would not call it storming,” Stepashin added. “It’s called freeing the people.”

“Let them come and storm the place,” Basayev, the rebel leader, said at a news conference inside the hospital Thursday night. “It does not matter to us when we die. What matters is how we die. We must die with dignity.”

There had been earlier signs that hope for a negotiated settlement was not lost. Basayev’s younger brother, Shirvani Basayev, arrived in Budennovsk on Friday afternoon and met with Deputy Prime Minister Nikolai D. Yegorov for about 20 minutes at the town’s police headquarters.

After meeting with Yegorov, Shirvani Basayev walked out of the police headquarters smiling, wearing a black-brimmed hat banded with the Islamic green ribbon that signified his willingness to die for the Chechen cause. He drove off with Yegorov, but there was no immediate word as to their destination.

Nor was it clear whether Shamil Basayev’s decision to unconditionally release the 31 bodies--after previously demanding an exchange of corpses--was linked to his brother’s arrival.

Two children were released Friday morning. On Thursday, Basayev said, five captured Russian officers had been shot and two female hostages released.

Official estimates of the number of hostages ranged from 500 to 5,000, but reporters who were invited to tour the hospital late Thursday said they believe that the true number of captives was perhaps 2,000.

On Friday, Russian television had shown scores of hostages sitting on mattresses and in corridors. Most were calm, but a few could be heard yelling, “Let us out!”

During Wednesday’s attack, the rebels stormed several city buildings, dragged people out of their cars, dragooned them from city buses, rounded them up at the local telegraph office and marched them to the captured hospital. They terrorized the town for three hours before police reinforcements arrived.

Residents yanked their children, their cars and their animals into their courtyards and closed their high steel gates. Many were still barricaded in their homes Friday.

Budennovsk is located in the rich flat farmlands of Stavropol, the region where former Soviet leader Mikhail S. Gorbachev was raised. The wheat fields and cornfields lining the road look much like those in the U.S. Midwest, except for the occasional Kazakh woman riding bareback after her cattle.

On Friday, those with relatives inside the hospital said they had no faith that the Russian authorities would get them out alive. Still, they clung to hope.

“They should give them whatever they want, stop the war, just make an agreement so they will let the hostages go,” Yelena Pigunova, 28, said, sobbing. Her husband’s natural gas truck had been found halfway through his daily delivery route, but he has not been seen.

“I hope he’s inside. I can’t find him anywhere,” Pigunova said, her broad, freckled face swollen with tears. “We have three children. I don’t know how I’m going to continue to live.

Times staff writer Carol J. Williams contributed to this report from Halifax, Canada.