The body of Konstantin Kukuchkin, 41, was found inside an embassy car near a bus stop in Saoula on the outskirts of the capital, said the security forces, quoted by the official news agency APS. In a man-hunt immediately afterward, security forces killed four gunmen.
The Russian's death brought to 33 the number of foreigners killed in the past six months. He was the fourth Russian to die, after two members of a military mission and the Russian wife of an Algerian citizen late last year.
An upsurge in Moslem fundamentalist violence in the former French colony has led to the deaths of 3,200 people since January 1992.
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