BUDYONNOVSK, Russia (AP) _ Russian commandos stormed a hospital today where Chechen rebels were holding more than 1,000 hostages, but the Chechens beat them back in a savage battle that left dozens dead or wounded _ including many of the hostages.

A short time later rebels released more than 100 women and children, some of whom screamed at the soldiers, saying they were killing innocent people. Troops said they freed about 60 more hostages early in the raid.

Fire trucks were called to extinguish blazes that engulfed part of the main hospital building. Despite the flames and smoke, several hostages stood at the windows with signs saying, ``Do Not Shoot.″

The attack _ called off after three hours _ appeared to have been a serious failure. The rebels showed no sign of giving up, and stuck to their demands that Russia end the war in their native Chechnya.

A spokesman for the Interior Ministry said the decision was made to storm the hospital because the 50 gunmen inside had become increasingly impulsive.

Heavily armed commandos swarmed into the hospital just after 5 a.m., firing automatic weapons and freeing about 60 hostages within minutes, officials said. Some of those hostages were wounded.

Russian military helicopters joined the attack and grenades could be heard exploding inside the hospital.

But the raid soon went awry, with Russian officials accusing the rebels of ``barbarian tactics,″ including using hostages as living shields as they fired on the commandos.

A woman hostage released later said some captives were made to stand in front of windows as Chechen gunmen fired from behind them at the commandos.

Officials said dozens of people were killed and injured on both sides, including hostages, but they had no overall figures. Ambulances were seen taking wounded people away.

Relatives of some of the hostages tried to enter the building to search for family members, but were held back by troops.

When the raid was halted, the Chechens released about 10 women with infants, who said many people in the hospital had been killed. But, they said, the rebels were not shooting the hostages and had offered to free all woman and children if the fighting stopped.

A hostage sent out to negotiate with Russian officials accused the military of needlessly endangering the prisoners.

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``The Russians are shooting and killing us. The Chechens are not touching us,″ the man, Yuri Kryhkov, yelled at officials.

Some 60 women and about 50 children were then released in three separate groups. Troops continued to ring the hospital and at one point an officer yelled over a megaphone, ``Surrender. Resistance is useless. You shall not leave here.″

Some of the released hostages said dozens of wounded people took shelter in the hospital basement.

Senior Russian officials at the scene were holding emergency talks on their next move. Officials said the rebels had presented new demands, but gave no details.

A Russian report said some rebels had escaped from the hospital into the city where they had clashed with troops. ``They are being eliminated now,″ the Interfax news agency quoted officials as saying.

The rebels earlier had refused an offer of safe passage, insisting they would kill themselves and the hostages unless Russian troops leave Chechnya. Moscow sent its forces in last December to end the southern republic’s self-proclaimed independence.

``We are sick of watching our villages being bombed, and our women and children being killed,″ the rebels’ commander, Shamil Basayev, said before today’s raid.

Chechen rebels have long threatened to wage a guerrilla war against civilians in Russia.

Basayev and about 200 heavily armed followers stormed into Budyonnovsk _ a green and usually sleepy southern city about 90 miles north of Chechnya _ on Wednesday. Russian officials said about 100 people were killed as the gunmen fired on police and rounded up civilians as hostages.

Basayev also claimed to have executed five hostages Thursday.

Reporters allowed into the hospital Thursday night said there were about 2,000 hostages there. Basayev claimed to have 5,000; Russia’s Federal Security Service said there were no more than 1,000.

Basayev said his heavily armed rebels got as far as Budyonnovsk by bribing police along the way. He said their intended destination had been Moscow, some 850 miles to the northwest.

``But the damned (road police) were so greedy! We just ran out of money,″ he said.

Security in Moscow has been heightened since the attack began.

Despite some hesitation, President Boris Yeltsin, flew Friday to the Group of Seven summit in Halifax, Nova Scotia. Parliament’s lower house voted later in the day for him to return home to deal with the crisis.