Russians to Meet on Fate of Chechnya : Caucasus: Yeltsin will chair session that could be a decisive battle between the hawks and doves. Bombing of rebellious Muslim republic appears to lessen.

MOSCOW —  Kremlin officials geared up Sunday for a critical Russian Security Council meeting that could decide the fate of Chechnya, the rebellious Muslim republic reeling under Russia’s continued bombing and pitched battles.

Meanwhile, government reports here asserted that a major clash between Russian troops and Chechen militants Sunday morning in the town of Argun left 1,000 Chechens dead.

But Chechen sources denied the casualty figure, and Russian information on the Chechnya conflict has been unreliable.

Bombing of the Chechen capital, Grozny, appeared to have lessened somewhat Sunday.

But many feared that the lull could be simply the calm before the storm--the expected ground assault by the Russian troops who have ringed the city to force Chechen President Dzhokar M. Dudayev into submission.

Russian Prime Minister Viktor S. Chernomyrdin and other Cabinet members met Sunday night to prepare options to present at today’s Security Council meeting, which is to be chaired by President Boris N. Yeltsin.

Yeltsin, who checked into the hospital for a nose operation the day before thousands of Russian troops launched the offensive on Chechnya on Dec. 11, has not made a public appearance since then.

But he has promised to speak to the nation early this week and propose a peace initiative in the conflict.

On the eve of the meeting, advisers and analysts predicted that the Security Council will become the setting for a decisive battle between hawks and doves in Yeltsin’s entourage.

“The options are the military way or political negotiations,” Emil Pain, a presidential adviser, told the Sunday night news program “Itogi.” “And everybody understands that what’s done must be done as quickly as possible.”

Pain said he had been told that Dudayev is willing to resume peace talks with Moscow, but it is not clear on what terms.

Sergei Kovalyov, Yeltsin’s top human rights watchdog, urged the immediate resumption of talks. “The time has come for a cardinal decision,” he said in a message to Yeltsin carried by the Itar-Tass news agency. “There is still a choice. . . . The possibility of this choice will not come again.”

Other sources said the military will propose today that special forces be given the go-ahead to storm Grozny, normally a city of 400,000 but now largely deserted except for Chechen fighters and residents with nowhere to flee.

Nationalities Minister Nikolai D. Yegorov warned Saturday that if Dudayev did not give in soon, “an armed operation will be launched in the coming days to place Grozny under the control of the federal authority.”

But Pain pointed out that “Grozny cannot be taken without great bloodshed. And what does great bloodshed mean for the country? It means a sharp change in the people’s attitude toward the conflict, and in international public opinion as well, and it could lead to a conflict within the government that would lead to general political chaos.”

With Yeltsin indisposed for the past two weeks, there already seemed to be a significant degree of political chaos in the Kremlin.

Officials were unable to say who exactly was overseeing the Chechnya offensive, and speculation mounted that Alexander Korzhakov, the loyal chief of Yeltsin’s personal security guards, was now really running the show.

Disapproval of the incursion into Chechnya has spread across the political spectrum and cost Yeltsin many of his close allies, although it has brought no mass protests. Reactions from Western governments remained muted, based on the principle that Chechnya is an internal Russian issue, but signaled mounting concern.

Prospects that the Russian troops would bog down in the northern Caucasus republic became especially poignant Sunday, the anniversary of the 1979 Soviet invasion of Afghanistan--the ugly, protracted conflict that became the Soviet equivalent of the Vietnam War.

Reports from Chechnya itself, the mountainous republic of about 1 million people that declared its independence in 1991, told of a besieged capital still defiant despite repeated bombing that continued through Sunday evening.

The Russian government’s press service asserted there had been 1,000 casualties near the Grozny suburb of Argun, which it claimed fell to the Russians. There was no word of Russian deaths. Hundreds of people are believed to have died in the hostilities.

The Associated Press reported that much of Grozny remained without heat or light and hospitals were running low on bandages.

Russian government spokesmen said the Chechens were threatening to mine the oil fields and refineries in the petroleum-rich republic, and, if backed to the wall, blow them up and create a “second Kuwait.”

They also said that Chechen militants had blocked a convoy carrying about 1,000 refugees trying to leave Grozny and confiscated their vehicles. There was no immediate Chechen response to the report.