Troops hoisted Russia's flag Thursday over Chechnya's presidential palace, the symbol of the republic's independence drive during five weeks of war with Moscow.
Earlier in the day, Chechen fighters had abandoned the palace, which had been wrecked by weeks of Russian artillery and rocket fire. The rebels also withdrew from the railroad station, another base of their resistance.The Chechen withdrawal gave the Russians effective control over most of Grozny's center.
But Chechen fighters played down their surrender of the palace's smoking hulk, saying they would take the fight to other parts of the capital.
"We won't have any particular bases - we'll be moving all around the city," said a mustachioed fighter with a Kalashnikov assault rifle slung over his shoulder. He would not give his name.
Rebels have vowed that if Grozny falls, they will wage a guerrilla war from the mountains south of the city.
They had stubbornly held off the Russians at the palace since the Kremlin began the ground assault on Grozny on New Year's Eve. Chechens said they left the palace overnight after a Russian bomb or artillery shell penetrated to the basement.
Rebel fighter Aindi Beksultanov said they had no plans to try and retake the building.
"Why? It's just a skeleton," he said.
He said that after the shell hit Wednesday night, the Chechen fighters began withdrawing. By midnight, they had evacuated all the Russian prisoners, and the last Chechen fighters withdrew at 3 a.m.
Soldiers of the 276th motorized rifle regiment raised the Russian tricolor, said Col. Ivan Skrylnik, spokesman for Russia's Defense Ministry. The government press office confirmed the report.
Grozny was relatively calm Thursday after a night of relentless artillery and rocket attacks. A pall of dark smoke hung over the city, amid intermittent artillery and rocket fire.
The Russians were directing their artillery to the south of Grozny's center, apparently in an effort to disrupt supply lines to the rebels.
In the ground assault on Grozny, a few hundred Chechens had battled one of the world's most powerful armies to a standstill in the city center, blunting the Russians' overwhelming superiority in men and weapons.
Thousands of people have been killed since Russian troops moved into the predominantly Muslim republic in the Caucasus Mountains on Dec. 11 to put down its drive for independence.
The first prisoner exchange of the war - one Chechen for one Russian - took place Wednesday at Assinovskaya, a village 35 miles west of Grozny.
Mousa Belikmayev, a 17-year-old Chechen captured after being wounded, returned home to a hero's welcome. Sergei Kuznetsov, a 19-year-old Russian whose platoon surrendered during a battle in Grozny on Sunday, was taken to a Russian camp while soldiers at a nearby checkpoint shot off flares.