Yeltsin Purges Cabinet, Sparing Defense Chief : Russia: President, hoping to avert no-confidence vote, fires three top officials over handling of hostage crisis.

President Boris N. Yeltsin on Friday fired three top officials for negligence during a deadly hostage crisis last month, but he left in office Defense Minister Pavel S. Grachev, the most hawkish and hated of his Cabinet members.

The sackings were expected to appease Russia’s unruly lower house of Parliament, the Duma, ahead of a threatened no-confidence vote in the government today.

But Yeltsin’s retention of Grachev, who has spearheaded the Kremlin’s disastrous assault on separatist rebels in the republic of Chechnya, was likely to perpetuate Russia’s latest leadership crisis and put a damper on negotiations to end the 6-month-old war.

The three dismissed Cabinet members--Interior Minister Viktor F. Yerin, Federal Security Service chief Sergei V. Stepashin and Deputy Prime Minister Nikolai D. Yegorov--had offered to resign a day earlier during a special session of the federal Security Council headed by Yeltsin.

Along with Grachev, the so-called power ministers had been accused of incompetence that led to security lapses allowing Chechen guerrillas to stage a bloody raid on the southern Russian town of Budennovsk last month. At least 123 people died and more than 1,000 were held hostage for six days.

Yeltsin also dismissed Yevgeny S. Kuznetsov, governor of the Stavropol region where the hostage incident began June 14. Russian media have reported that the Chechen gunmen bribed local police in the Stavropol region to gain entrance to Budennovsk.

The dismissals give the 450-seat Duma a face-saving pretext for reversing a no-confidence vote issued June 21 to condemn the government’s handling of the Budennovsk incident. Federal troops under Yerin’s ministry twice stormed the hospital where the hostages were held but failed to free them, and the Chechen perpetrators were allowed to escape under military escort back to their homeland.

Sergei K. Medvedev, Yeltsin’s press secretary, announced the firings in a broadcast carried on the evening news. He described the president’s action as “a difficult decision” but one that was necessary in view of the Security Council session, which demanded “a significant restructuring of Russia’s secret services and law enforcement bodies.”

Yeltsin had publicly lashed the defense, interior and security forces for “errors and neglect of duty” at the opening of the Security Council meeting shown on television.

Duma leaders had insisted on the firings as the price for reversing their no-confidence vote and sparing Yeltsin the need to make another power grab that could further dent his already damaged image as a democrat.

But getting rid of the three security officials was not motivated by a desire to control the Duma vote as much as “showing everyone he does not depend on the whims of his ministers,” Pavel Felgenhauer, military analyst for the daily Sevodnya, said in an interview.

He disputed Medvedev’s claim that the decisions were difficult for Yeltsin, noting that, over the years, the president has fired dozens of his “marionettes” without remorse when they became political liabilities.

Prime Minister Viktor S. Chernomyrdin, who was the primary target of the original no-confidence vote, suggested during a press conference with visiting Vice President Al Gore that the government could withdraw its demand for a new confidence vote today if “circumstances” made that advisable.

Yeltsin and Chernomyrdin find themselves in the awkward position of having insisted that the Duma reconsider its overwhelming vote of no-confidence--reaffirmation of which would force the president to either sack Chernomyrdin and the Cabinet or disband the Duma.

Yeltsin has already made clear that he would choose the government over the Duma, but disbanding the legislature and calling early elections would cost him politically.

While the parliamentary deputies have blocked virtually all reform legislation since taking office 18 months ago, their dismissal would constitute the second time in less than two years that Yeltsin scuttled the legislature and ruled by decree. He had to send in tanks and troops to quell the confrontation with political opponents in October, 1993, after disbanding the last Parliament.

Chernomyrdin described the Budennovsk tragedy as “our pain for the innocent people who died . . . [but] also our disgrace, of the whole country which failed to defend its own citizens.”

Gore praised the prime minister for “grace under pressure” during the hostage crisis and appealed to Yeltsin to take advantage of the current peace talks with the rebels to bring an end to the war in Chechnya.