SPORADIC gunfire crackled across the Chechen capital Grozny today as Russian troops pursued fleeing rebels who held parts of the city for four days.

Interior Minister Anatoly Kulikov said 300 rebels had been killed and 350 wounded while 79 Russian soldiers and Interior Ministry troops had died and 276 were wounded, according to Tass.

An official of the Moscow-installed Chechen government said Russian forces were mounting ``clean-up'' operations against rebels in the shattered city's suburbs.

Kulikov said a criminal investigation had begun into how the rebels had managed to get into Grozny, sparking Russia's biggest military operation since it captured the city from the rebels one year ago.

He admitted his men had been caught with their guard down and accused both Russian troops and Moscow-backed Chechen police of ``outrageous negligence''.

President Boris Yeltsin was today said to be on the verge of firing his Defence Minister, who urged him to send troops into Chechnya 15 months ago and boasted a single regiment of paratroopers could defeat the rebels in two hours.

The bungled war has hurt Yeltsin's re-election chances and Defense Minister Pavel Grachev has increasingly been seen as a political liability.

Accusations of incompetence and corruption have dogged Grachev for years. Underscoring corruption in the army, the Interfax news agency said today that soldiers last week sold a tank and an armoured personnel carrier to the Chechens for #4000.

It said 39 soldiers manning a checkpoint in eastern Chechnya sold the vehicles to the rebels after having a party with them on Saturday.-Reuter/AP