Russian security forces in an armored personnel carrier smashed through the wall of a store to rescue two hostages held by suspected Islamic militants Friday as authorities tried to clear out the last pockets of rebel resistance after more than a day of fighting that killed at least 108 people.

Chechen rebels claimed involvement in the near-simultaneous attacks on police and security facilities that began Thursday in this southern Russian city of 235,000 people and left corpses lying on the streets.

The fighting in the Kabardino-Balkariya (search) republic near Chechnya (search) raised fears that Islamic militants who have been fighting Russian forces for most of the past decade were opening a new front in the troubled Caucasus region.

President Vladimir Putin (search) praised the response by the security forces but lamented that such attacks can occur, news agencies quoted him as saying.

"It is bad that such bandit raids are still possible here," Putin said, according to the news agency Interfax, in his first public comments on the fighting.

He added, however, "it's good that this time all the law-enforcement agencies worked in coordination, effectively and tough."

Putin has been beleaguered by attacks that have killed hundreds and underscored his failure to bring the turbulent Caucasus under control. On Thursday, he ordered a total blockade of Nalchik to prevent militants from slipping out and ordered security forces to shoot any armed resisters.

Putin indicated the central government will continue taking an uncompromising line in the region.

"Our actions must be adequate for all the threats that bandits make to our country. We will act hard and consistently, as we did in this case."

Militants battling Russian forces in the region near Chechnya have employed terrorist methods including suicide bombings and the seizure of more than 1,000 hostages last year in a school in Beslan (search), about 60 miles southeast of Nalchik. More than 330 people, mostly children, were killed in that siege.

In freeing the two hostages Friday in the center of Nalchik, soldiers shot grenades through a barred window of a store. Three militants were killed, Deputy Prosecutor General Vladimir Kolesnikov said.

Zaur Makhsiyev, who said his 20-year-old sister, Leyla, had been inside the store, said she was uninjured but suffering the aftereffects of an unspecified gas presumably used to incapacitate the militants. The use of gas could not be independently confirmed.

By midday, the head of the regional government, Gennady Gubin, announced that all rebel resistance had been suppressed and all captives had been freed, the Interfax news agency reported.

"All points of rebel resistance have been suppressed and hostages freed. Now the security forces are conducting a sweep of the city to find rebels who are hiding," it quoted Gubin as saying.

Interfax reported later that 12 militants had been killed in the local office of the Russian prison administration, according to deputy administration chief Valery Krayev. Nine hostages were freed from the building earlier Friday, Interfax said, while the RIA-Novosti news agency said three police officers who had been held captive there were killed.

It was unclear whether the militants had any specific demands. The rebels' strategy has been to sow instability, capitalizing on the turbulent Caucasus' grinding poverty to swell their recruits, buying off corrupt officials to get weapons, and unleashing bombings and hit-and-run attacks against police.

The president of Kabardino-Balkariya, Arsen Kanokov (search), told Interfax that nearly 150 militants were involved in the attack and most were local residents. He said the main reason for the attack was the republic's difficult economic situation.

"The population's low income and unemployment create the soil for religious extremists and other destructive forces to conduct an ideological war against us," Kanokov was quoted as saying.

At least 108 people, including 72 attackers, had been killed in the fighting, according to a tally by officials, news reports and an Associated Press reporter.

Among them were 24 law enforcement officers, Interior Minister Rashid Nurgaliyev told the RIA-Novosti news agency.

The regional department of the Emergency Situations Ministry said 18 civilians had been killed and 139 wounded, said ministry duty officer Sergei Petrov.

Six of the most gravely wounded were being flown to Moscow, 870 miles to the north, for treatment, ITAR-Tass reported.

Although Chechen rebels claimed involvement, Deputy Interior Minister Andrei Novikov told reporters in Nalchik that two-thirds of the militants, who numbered more than 100 and were mostly aged 20-30, were local residents. The rest were from other Caucasus republics, he said.

He said the alleged leader of the attack, Ilyas Gorchkhanov, had been killed. He also said that a large quantity of weapons, ammunition and explosives had been seized during the past two days around the republic.

Nurgaliyev said 31 rebels were detained, RIA-Novosti reported.

Bloodied corpses still lay in the streets Friday. One was near the entrance to a police station and the regional anti-terrorist center, where most of the windows had been blown out.

Deputy Interior Minister Alexander Chekalin said the fighting began after police tried to capture about 10 militants in a Nalchik suburb, and that the attacks were aimed at diverting police. All 10 suspects were killed, he said.

The Kavkaz-Center Web site, seen as a voice for rebels loyal to Chechen warlord Shamil Basayev (search), said it had received a message claiming responsibility for the attack on behalf of the Caucasus Front. It said the group is part of the Chechen rebel forces and includes Yarmuk, an alleged militant Islamic group based in Kabardino-Balkariya.

The strategy of launching simultaneous attacks on police facilities was similar to last year's siege in another Caucasus republic, Ingushetia, in which 92 people died and police armories were looted. Basayev claimed responsibility for those attacks and the Beslan raid.

Dagestan, another Caucasus republic, has suffered a sharp rise in violence this year, with bomb attacks and clashes between police and fighters of uncertain affiliation reported almost daily.