President Boris Yeltsin on Wednesday ordered Russia's air force to stop bombing Grozny from midnight, while Russian forces around the shattered Chechen capital regrouped and drew in reinforcements following a humiliating military defeat.


As Chechen soldiers scurried through the streets of Grozny, emboldened by their success in driving off an armored Russian attack in fierce battles over the previous days, the purpose of Yeltsin's announcement was not clear.


The president's press service said he made the decision to halt aerial bombings after talks with Russian government leaders and after taking into account appeals from legislators and ordinary people who have protested against the bloodshed in the breakaway republic.


"The decision was taken on the basis of the information the president has received ... and guided by the desire to prevent an increase in the number of victims among the civilian population," the press service said in a statement.


This is the second time Yeltsin has called an end to bombing of civilian targets in Chechnya. The first such order, announced Dec. 27, had no discernible effect.


In a separate statement, Deputy Prime Minister Nikolai Yegorov, in charge of coordinating Russia's military operation in Chechnya, said Grozny would be captured Thursday.


"Russian troops should take Grozny without fighting on January 5," Itar-Tass quoted Yegorov as saying, in what seemed an unlikely prediction.


Thousands of Russian troops and hundreds of tanks had poured into the city in waves on New Year's Eve to begin a four-day assault in which military jets screamed overhead, firing missiles and dropping bombs into the devastated city.


But fighters loyal to rebel leader Dzhokhar Dudayev have so far defied all attempts to seize the city and on Wednesday moved freely through the center, firing their kalashnikovs into the air in celebration and shouting "God is great."


Dudayev's whereabouts have not been known for days, although some Chechen reports said he was directing the defense of the city from a secret bunker somewhere in the outskirts of Grozny. Interfax, citing intelligence sources, said reports were circulating among Chechens that Dudayev was dead, but offered no evidence or details.


Gunfire erupted in the suburbs Wednesday morning, but a thick, milky fog enveloped the capital most of the day, reducing visibility to a few blocks and muffling the heavy shelling that has destroyed much of the center.


On Monday and Tuesday, Russian units had penetrated to the center of town around the presidential palace and train station, but then withdrew, leaving behind the charred remains of armored personnel carriers and Russian soldiers.


Russian troops were reportedly preparing for a fresh assault Wednesday that would include reinforcements of well-trained infantry and paratroop units, according to Boris Agapov, vice president of the neighboring republic of Ingushetia. Itar-Tass reported that a ground unit and a marine battalion were being sent from the Murmansk region in northwest Russia, while other units reportedly were on their way from the Ural mountains and the Far East.


The Russian government's press service said federal troops were continuing their mission but the situation in Grozny "has started to change drastically. There were fewer clashes and they became less intensive."


The reasons for and meaning of that claim were not clear. Sergei Yushenkov, head of the State Duma's Defense Committee, quoted Agapov as saying the next attack was due Jan. 5 to 6.


Ingushetia has expressed sympathy with Chechnya's struggle against Moscow.


Yeltsin's decision to stop the bombing reflects widespread discontent in Russia and growing concern abroad over his dispatch of troops into Chechnya on Dec. 11 to crush the tiny southern region's bid for independence.


Air raids, which have caused many civilian casualties in Grozny, have aroused the fiercest criticism. They have continued despite Yeltsin's earlier pledge to halt them. Fresh raids were launched Wednesday morning.


The raids have prompted fears that Yeltsin is struggling to assert his authority and that Russia's reforms are in danger.


"It is not only the fate of Chechnya alone but the fate of all Russia which is being decided in Grozny," Russian human rights commissioner Sergei Kovalyov, who has been staying in central Grozny, told reporters.


Hundreds of people are feared killed in battles since Russia stepped up fighting Saturday by launching a tank-led assault on Grozny. Much of the city's population of 400,000 has fled and many buildings have been destroyed.


Russia's migration service said the number of refugees from Chechnya had passed 130,000. But in Geneva, UN officials said they were facing delays in getting clearance for an expert team to fly to Russia to set up a program to aid refugees.


About 60 kilometers west of the capital, villagers in Arshty -- a clump of homes on the Chechen border with Ingushetia -- were trying to make sense of a Russian aerial attack Tuesday that left four residents dead and seven wounded.


The villagers, who belong to the Melkhi ethnic group, said two Sukhoi fighter-bombers accompanied by three helicopters swooped over the settlement and fired rockets without warning onto a muddy main street where a family was walking.


Killed instantly were a 42-year-old woman and her daughters, one 22 and the other 18. Another woman walking with them also was killed. Seven others were wounded.


"There was no reason for this at all. We're all peaceful people, not a single rebel, not a single fighter," said one witness, Malmkhan Tsatsiev.


(AP, Reuters, Itar-Tass, Interfax)