Chechen rebel leader Aslan Maskhadov (search), a fugitive with a $10 million price on his head and linked by the Kremlin to a bloody school hostage siege, was killed Tuesday during a special forces operation — a significant propaganda victory for Russia in a war that has left tens of thousands dead.

Television channel NTV showed footage of the chief of Russia's Federal Security Service telling President Vladimir Putin (search) that Maskhadov had been killed.

Putin responded, "There is a lot of work here. We must augment the effort aimed at the defense of the citizens of the republic" — a clear indication that Russia intends to wipe out the rebels rather than seek a negotiated outcome.

Even if Russia wanted a settlement with the separatists, Maskhadov's death may make that more difficult to achieve. His killing could well place the insurgents firmly in the camp of the more radical warlord Shamil Basayev (search). While Maskhadov was secular-minded, Basayev is an adherent of the strict form of Islam preached by Usama bin Laden (search).

"Maskhadov was the only one with whom a peaceful agreement could have been made," the Interfax news agency quoted Alexander Cherkasov, of the human rights group Memorial, as saying.

Maskhadov last week reportedly called for talks with Putin on ending the war. But that call, like previous proposals, was rejected.

Reports differed on whether he was killed by the Federal Security Service forces or inadvertently shot by one of his own bodyguards in a bunker in north-central Chechnya.

Russian television showed video of a shirtless corpse strongly resembling the 53-year-old Maskhadov lying in a pool of blood. The leader of separatist forces in Chechnya fought the Russian army to standstill in 1996, then was elected president of the republic when the Russians withdrew.

But as head of de facto independent Chechnya, Maskhadov lost influence to fundamentalist Islamic rebels. By the time Russian forces returned in 1999, he was overshadowed by Basayev and regarded as a comparative moderate among the separatists.

The Kremlin consistently blamed Maskhadov for involvement in terrorist attacks, such as the Beslan school siege in September in which more than 330 people died, half of them children, and a hostage seizure at a Moscow theater in 2002 that killed 129 people. Maskhadov denied any involvement.

Like most Chechens of his generation, Maskhadov was born in exile in Kazakhstan, where Chechens had been deported en masse in 1944 under Soviet dictator Josef Stalin. The exile added fuel to Chechens' resentment of Russians.

Maskhadov's family was allowed to return in 1957, and in 1969 he began training to become a military officer and rose to the rank of general.

He was an artillery division chief of staff in Lithuania in January 1991, when Soviet special forces unleashed a brutal crackdown on independence demonstrators, an event that presaged the Soviet collapse that year.

By the end of 1992, he had quit the military and returned to Chechnya, where another former Soviet general, Dzhokhar Dudayev, was leading an independence push.

Maskhadov was chief of staff of Dudayev's armed forces when Russia launched its war against the separatists in 1994. He took full control of the forces after Dudayev's killing in April 1996; in August, rebels stormed the capital of Grozny and trapped thousands of Russian soldiers.

The assault persuaded the Kremlin to negotiate an end to the unpopular war, which led to the withdrawal of Russian forces but put off the critical issue of Chechnya's political status, leaving it in limbo.

Maskhadov was elected Chechen president in 1997, but efforts to attract aid and investment failed. Crime soared, as did kidnappings, which made Chechnya one of the world's most dangerous places.

After attacks by Basayev's forces in neighboring Dagestan, Russia attacked Grozny in 1999, and Maskhadov and his government fled. His representatives have said he remained in Chechnya after that, and he and his spokesmen issued statements calling for talks and denying involvement in various terrorist attacks.

Federal Security Service head Nikolai Patrushev said Maskhadov was killed in the village of Tolstoy-Yurt, an area that has been under firm Russian control while rebels were concentrated in the republic's mountainous south and in Grozny.

Interfax cited Ramzan Kadyrov, the Kremlin-backed deputy Chechen prime minister, as saying Russian forces had intended to take Maskhadov alive but he was killed by careless gun-handling by his bodyguards. Interfax said three Maskhadov aides were detained.

Maskhadov's envoy in London, Akhmed Zakayev, told The Associated Press that he had received confirmation of Maskhadov's death. He said federal forces had found Maskhadov "by chance" during a routine sweep.

Maj. Gen. Ilya Shabalkin, a spokesman for forces in the region, said Maskhadov was killed when federal forces blew up the bunker.

NTV broadcast what it said was a security service video showing Maskhadov's body as well as Russian troops in camouflage and black masks sifting through guns, ammunition and grenades, and unfolding a green, red and white Chechen flag.

Kadyrov was quoted as saying that a rebel who had been captured several days ago had told authorities of Maskhadov's presence in Tolstoy-Yurt. Russia had offered a $10 million bounty for information leading to the capture of Maskhadov and Basayev, but Kadyrov indicated the reward might not be paid because the information had not been offered voluntarily.

White House spokesman Scott McClellan refused comment, other than to say that the situation in Chechnya "should be resolved through a political process."

That prospect may have died along with the soft-spoken Muslim, Zakayev said.

"Maskhadov was the legally elected president, and in many ways he was a factor of restraint, both inside Chechnya and outside its borders," he said on Ekho Moskvy.

"And of course, today those who were convinced that there can be no talks with the Kremlin, that no dialogue can be conducted with Moscow, their position will become stronger and so will their approach to solving the problem," he said.