The conflict saw Russian troops humiliated as Chechens suffered 60,000 deaths and were bombed to economic ruin. The peace deal stipulates that Chechnya's political status is to be resolved before Dec. 31, 2000. Russia interprets that as meaning no decision will come until the deadline, but the Chechen government wants to settle things before then. And I see them deteriorating further in the months to come. Chechen rebels led by Shamil Basayev take more than 1,000 hostages in the Russian town of Budyonnovsk.
Negotiations result in a cease-fire and peace talks.
Later that month, President Yeltsin announces a peace plan, including troop withdrawals and democratic elections. The two sides agree to defer consideration of Chechnya's political status until 2001. Internationally monitored elections bring former rebel leader Aslan Maskhadov to power as Chechen president. Former rebel leader Shamil Basayev named prime minister, asked to form a new government. Although Chechnya accounts for only 0.7 percent of Russia's total territory, the area is strategic, since Russia depends on a 95-mile stretch of oil pipeline that runs through the region.