Sept. 4 (Bloomberg) -- Russia is counting the dead and wounded after the biggest hostage-taking assault the country has faced left at least 150 people dead at a school, many of them children. Russian troops yesterday stormed the building, held for two days by an armed group demanding independence for Chechnya.

The death toll at the school in Beslan, North Ossetia, may be ``much higher,'' according to President Vladimir Putin's adviser Aslanbek Aslakhanov. An unidentified health ministry official in North Ossetia told the Interfax news agency that more than 200 people were killed in the incident. At least 646 people, including more than 330 children, are in hospitals. Troops stormed the school as terrorists fired on hostages escaping the school's gymnasium, said Valery Andreev, head of local division of the Federal Security Service.

Resistance from the terrorists was suppressed as of 11:30 p.m. Moscow time, an unidentified official in the security command post told Interfax. Three of the assailants may have escaped the cordon in the town, the news service said.

Four Chechnya-related terrorist attacks in the past 10 days, which Russian authorities have linked to international Islamic terrorists, have left more than 200 people dead. They came five years after Vladimir Putin arose to run Russia as prime minister under Boris Yeltsin, promising to quell a rebellion by Muslims in Chechnya.

``Security is about broader building of institutions, and it's pretty clear that the Russian leadership has failed to do that,'' said Celeste Wallander, director for Russia at the Washington-based Center for Strategic and International Studies. ``Putin hasn't used the last five years to do that. We are beginning to see the Russian people criticizing'' him.

Wider Battle

The siege at Beslan, located about 60 kilometers (37 miles) west of the Chechen capital Grozny, may strengthen Russia's case that its fight against Islamists is a front in the global battle against al-Qaeda and allied groups that President George W. Bush has called a threat to U.S. security.

Of 20 gunmen killed by Russian troops at the school, 10 were from Arab countries, FSB's Andreev said. A hostage identified only as Teimuraz told Associated Press Television News that there were 28 people in the armed group, including women who wore camouflage uniforms. They began wiring the school with explosives after seizing the facility, Teimuraz told AP.

``This is yet another grim reminder of the lengths to which terrorists will go to threaten the civilized world,'' Bush said today at a campaign appearance in Milwaukee.

The violence at Beslan may be Russia's worst-ever terrorist attack, surpassing the death toll from the October 2002 siege of a Moscow theater, when Chechen rebels took more than 800 hostages.

At least 129 hostages died then, when special forces stormed the Moscow theater, ending a three-day standoff and killing all 41 hostage-takers.

Firing on Children

The armed group took more than 1,000 people, mostly children, hostage in Beslan on Sept. 1 when they assembled for the first day of the school year, an occasion widely celebrated in Russia with children and their parents wearing their best clothes and carrying flowers for teachers.

A two-day standoff broke into a shootout and storming of the building after terrorists started firing at children who were trying to escape the school, Russian security forces said.

The hostages fled when two bombs went off just after 1 p.m. Moscow time as rescuers entered with the terrorists' permission to collect the bodies of 10 to 20 people killed as the siege began, FSB's Andreev said. A group of 40 children broke out of the school after the bombs went off. The terrorists started firing at the children, and armed bystanders then also started shooting at the hostage-takers, he said.

Cordon, Shooting

The shootout and the storming of the school weren't shown on television because authorities cordoned off the area, keeping film crews away.

``In terms of politics, the ambiguity about who started the shooting may play to Putin's favor,'' said Michael McFaul, a senior fellow at Stanford University's Hoover Institution.

Prior to the raid in Beslan, two passenger planes crashed Aug. 24 when bombs went off, killing 89 people, and 10 died Monday from a suicide bomb attack near a Moscow subway station.

A group calling itself the Islambouli Brigades claimed responsibility for the plane and subway attacks. Putin said the Islambouli group is linked to al-Qaeda.

The Chechen separatist movement fell under the influence of Muslim fundamentalists amid Russian brutality toward civilians in a war from 1994 to 1996, when Arab mercenaries joined the conflict. Russians and Chechens have been criticized by groups such as Amnesty International for mistreating civilians.

Chechnya Links

The armed group in Beslan had demanded the separation of Chechnya from Russia, North Ossetian President Alexander Dzasokhov told Agence France-Presse.

Russia has about 80,000 soldiers in Chechnya. The republic on Sunday elected Alu Alkhanov president in a vote organized by the pro-Putin government to replace Akhmad Kadyrov, who was assassinated in May. Rebels called the elections illegitimate.

Russian troops invaded Chechnya in August 1999 for the second time in five years to suppress a separatist rebellion. Since then, Putin has refused any compromise, saying the campaign in Chechnya is part of the international war on terrorism. North Ossetia borders Chechnya.

``The second Chechen war governed the Kremlin's choice of a successor to Yeltsin and provided a political springboard for Vladimir Putin,'' Dmitry Trenin, a researcher at the Carnegie Endowment for International Peace, said in a book ``Russia's Restless Frontier,'' published this year. ``By the end of his first presidential term, however, the lingering conflict had become a liability that threatened to mar Putin's political legacy.''

Putin's popularity has been declining this year, according to opinion polls by the Moscow-based Levada Center, an independent agency. His approval rating stood at 68 percent last month, down from 81 percent at the start of the year and the lowest level for Putin since December 2000, Levada said, based on surveys of 1,600 people across Russia with a margin of error of 3.4 percent.

To contact the reporter on this story: Vladimir Todres in Moscow at at vtodres@bloomberg.net

Last Updated: September 3, 2004 16:42 EDT