The prominent founder of an independent newspaper in the volatile Dagestan republic has been shot dead, in the latest in a series of killings of Russian journalists.

Khadzhimurad Kamalov, 46, was gunned down on the street in the capital Makhachkala on Thursday evening as he stepped out of his office after closing the latest edition of Chernovik (meaning "rough draft").

The murder will have a chilling effect on press freedom in Dagestan, a Muslim Russian republic on the Caspian coast that has preserved a pluralistic media in sharp contrast to the dictatorial regime in neighbouring Chechnya. It is the latest killing to shake the republic, already racked by growing Islamic insurgency and heavy-handed tactics by local security services.

A masked killer in a black Lada Priora reportedly fired at least 14 rounds through the window at Kamalov, who died as he was taken to hospital.

Hundreds of people gathered for his funeral in Makhachkala on Friday.

Prosecutors said the killing was likely to be connected to Kamalov's work at the weekly paper. The murder happened on Russia's day of remembrance for journalists killed in the line of duty.

The Committee to Protect Journalists condemned the killing. "The assassination of Gadzhimurad [sic] Kamalov is a massive loss for independent journalism in the North Caucasus, Russia's most dangerous place for reporters," it said in a statement.

"He always came out for unity and peace, and carrying out dialogue," said Magomed Magomedov, president of Dagestan. "This is a big loss not just for journalists, but for the whole republic."

Kamalov was one of eight journalists placed on an "execution list" distributed anonymously in Makhachkala in 2009. The authors of the list said they were seeking revenge for the deaths of police and civilians in Dagestan's unrest and identified Kamalov as a target for allegedly sympathising with rebel fighters.

"Know that you are in our sights and soon every one of you will answer for your actions," the anonymous letter read.

Hundreds of people have protested in recent weeks against the republic's security services, accused of widespread human rights abuses and kidnappings. On 25 November, a protest in Makhachkala of up to 3,000 people called for an end to lawlessness among the security services.

Kamalov's murder has shed renewed light on the Kremlin's claims of calm in Dagestan, as it continues to avoid crafting a strategy to deal with the republic's growing violence. Moscow is pouring $15bn into the volatile Caucasus region, including Dagestan, in order to build up its ski tourism, while Dagestani-born oligarch Suleiman Kerimov has spent billions bringing world-renowned footballers to local club Anzhi, in a bid to show that the republic enjoys a degree of normality.

Magomedov said Kamalov's murder was "the work of people who do not want peace and stability in our society, who don't want development. They want to shake up the situation, to sow chaos in the republic."

Chernovik, one of the most respected publications in the North Caucasus, has a reputation for exposing corruption and human-rights abuses by state security forces that fuel Dagestan's Islamist insurgency, which is the worst in the region and causes hundreds of deaths each year.

In 2008, the newspaper's then editor, Nadira Isayeva, and other journalists were indicted on extremism charges in connection with an article that quoted Rappani Khalilov, a jihadist. They were cleared earlier this year.

Isayeva, however, left Dagestan in the summer after a smear campaign in which a supposed recording of her speaking in a sexually explicit phone call was spread viraly. The smear was devastating for Isayeva, a conservative Muslim, and a sign of the immense pressure on Chernovik reporters.

Tanya Lokshina, deputy director of Human Rights Watch in Moscow, said: "Kamalov's death is terrible and it will have a monstrous effect on the free press in Dagestan. He had many enemies because of Chernovik's searching reports on corrupt businesses and the transgressions of the local siloviki [law enforcement bodies]."

Lokshina added: "Even if there was a personal aspect to his murder then it became possible because of the atmosphere of complete impunity which the Russian authorities have allowed to flourish there."

There have been a series of assassinations of reporters and civil activists in Russia in recent years. Paul Klebnikov, the editor of the Russian edition of Forbes, was killed in Moscow in 2004, and Anna Politkovskaya, the crusading Novaya Gazeta correspondent who wrote about Chechnya, was shot dead in a lift in her apartment block in 2006.

Unknown assailants murdered Natalya Estemirova, the human rights activist, in 2009, dumping her body in a field in Ingushetia, another strife-torn republic in Russia's Caucasus.