"Putin has promised to stabilize the situation at all costs, and the costs are going to be pretty high," says TIME Moscow correspondent Andrew Meier. The fighters –- led by "Khattab," a Jordanian-born Saudi of the fundamentalist Wahabi movement, and by legendary Chechen rebel commander Shamil Bashayev -- captured four Dagestani mountain villages on Sunday, and are reportedly detaining the male population (though, because of significant local support, they may not be hostages). "There’s some fear in Moscow that Putin will take the opportunity to make his mark as prime minister by launching a large-scale military operation against the rebellion," says Meier. "And that could be very dangerous. Remember, the Chechens held off the Russian army for 21 months, and Moscow was a lot stronger back then." But like Chechnya, Dagestan sits astride a key oil pipeline, which makes it even harder for Moscow to say goodbye. "It’s difficult to see a compromise emerging here," says Meier. "It’s a lot easier to see military conflict spreading."
What do you get when you mix a secession-minded territory along Russia’s strategic oil pipeline; a handful of battle-hardened Islamic fundamentalist freelancers; and a former intelligence chief-turned-prime minister determined to establish his authority in Moscow? The potential for another Chechnya -- or even worse. Rebel fighters holed up in a series of mountain villages Tuesday proclaimed an independent Islamic republic in Dagestan, even as Russian troops pounded them with helicopter gunships and newly appointed Prime Minister Vladimir Putin vowed that the rebellion would be quashed within days.