The conflict in Russia's breakaway republic of Chechnya is likely to escalate in the coming three months, an influential international mediation organisation warned in its latest report released on Wednesday.

Increased casualties and massive human rights violations are likely in the absence of renewed efforts to seek a political settlement, said Fewer, the Forum on Early Warning and Early Response, in an analysis compiled with its regional partner, the Peace Mission in the North Caucasus, headed by General Alexander Lebed.

The report said that signs of preparations for a renewed military confrontation included the visit by President Vladimir Putin to troops in Chechnya last month, and a regrouping of rebel forces near the capital Grozny, backed by indications of renewed international financing for their cause. It said both sides had made efforts to remove hostages and prisoners of war into more secure areas.

The analysis was released as it emerged that there had been the largest military clashes in Chechnya this week for over a year between Federal forces and rebels, in the southern Argun gorge.

Sergei Ivanov, the new defence minister, said last week that there were no plans for further withdrawals of troops from the region beyond the 5,000 withdrawn since January, in spite of previous assurances that the levels of up to 80,000 could be cut to 20,000.

The report said that the rebel leader Ruslan Gelayev was likely to coordinate offensives in parts of Chechnya, with both terrorist attacks and retaliation by federal forces hindering efforts to achieve peace.

Fewer and the Peace Mission have been attempting to broker reconstruction in Chechnya. They have stressed the need for economic development, improved law enforcement and considerable autonomy for the republic, with a political settlement brokered with all those involved including armed separatist groups to end the violence.

They have warned that low morale among federal troops, alienation of the civilian population, profiteering from the war, human rights abuses and external financial support for the conflict have all posed problems to achieving peace.

By Andrew Jack in Moscow
Financial Times