Ironically, the Budyonnovsk debacle could yet lead to peace in Chechnya; it might even produce a personal triumph for Yeltsin’s prime minister, Viktor Chernomyrdin, who negotiated an end to the hostage crisis and got peace talks started. By late last week, a ceasefire was shakily in effect throughout the breakaway republic of Chechnya, and the negotiations had made some progress. The Russians, chastened by their failure in Budyonnovsk, appeared ready to negotiate a settlement; the Chechens, Beaten on the battlefield but redeemed by their daring raid, seemed willing to settle for something less than full independence. But whether Budyonnovsk ultimately leads to a peace agreement or to renewed slaughter, it had already contributed mightily to the paramount trend of the last decade in Russia: the steady erosion of central authority.

How could anyone respect a government that can’t protect its own people or punish aggressors? Russian security forces twice failed to capture the hospital where Chechen guerrillas held more than 1,000 hostages.

Then, while Yeltsin was playing word statesman at the Group of Seven summit in Halifax, Nova Scotia, Chernomyrdin stepped in, negotiating a deal that allowed the Chechens to leave, established a cease-fire in their homeland and launched talks on a political settlement. The Russian military commander in Chechnya, Col. Gen. Anatoly Kulikov, balked, threatening to end the ceasefire unless the Chechens handed over Shamil Basayev, the leader of the raid on Budyonnovsk. Although Kulikov was rebuked by the government, the Chechens said they would comply with his demand. That kept the negotiations alive, but no one expected the Chechens to surrender their hero. The Chechen military commander, Aslan Maskhadov, said his entire nation was “ready to die to prevent a single hair dropping from Shamil Basayev’s head.”

Tightened security: After the first round of peace talks, the two sides issued a joint statement insisting that “there are no issues that cannot be resolved at the negotiating table.” But no agreement was in sight on the key question of Chechnya’s political status. Any conceivable agreement would probably undermine Moscow’s weakened authority. Already a jittery Kremlin had thousands of troops patrolling the streets of Moscow to guard against terrorist acts, and sold-out rock concerts by Rod Stewart and Bon Jovi, scheduled for July 8 and 9, were canceled because of the strain on the security forces.

If the Duma decides to call Yeltsin’s bluff, a second no-confidence vote could be held at the end of this week. And if that leads to early parliamentary elections, it isn’t certain who would benefit; Yeltsin is vastly unpopular, but so are most other politicians. The president might decide to dismiss his government instead of calling an election. That would cut Chernomyrdin down a notch; his higher profile worries some of Yeltsin’s supporters.

Yeltsin might be able to head off a political showdown by sacking some of the officials responsible for the Chechen disaster. Security chief Sergei Stepashin and Interior Minister Viktor Yerin were thought to be vulnerable. So far, however, the president still seems to rely on the man who has done more than anyone else to get him in trouble: Defense Minister Pavel Grachev, General Grachev, who had predicted an easy victory in Chechnya, was still spoiling for a fight there. He boasted last week that Chechen forces had been reduced to “scattered bands waging sabotage and terrorist warfare.” Grachev’s loyalty to Yeltsin, displayed during the violent confrontation with Parliament nearly two years ago, is proving to be a liability. Yeltsin needs military support, but it isn’t dear that the architect of a bad war is the man to deliver it.