At least 10 civilians, including five children, have been taken out dead on stretchers on Friday from the southern Russian school where hundreds of children were taken hostage. Russian special forces began to storm a residence where hostager-takers are hiding, looking for 13 abductors who managed to flee the scence of violence.

The Interfax news agency said a small group of hostage takerswho have managed to escape from the school after Russian forces stormed it were found hiding in a house adjacent to the building.

The militants are holding out within the areas of the first ring of cordons established by Russian special forces and the hideout has been encircled by policemen.

About 200 children hostages managed to escape the school and hostage-takers tried to flee when Russian forces stormed the site sieged by gunmen from Wednesday morning.

Gunfire and huge explosions continued even after the special forces took control of the school.

Five hostage-takers were killed and Russian special forces werepursuing two female kidnappers, dressed in white, who managed to flee the sieged school towards the south of the town.

Russian TV footage show paramedics carrying stretchers entered the school and brought children to ambulances.

Interfax said some of the hostage-takers, believed to number about 40, had tried to break out through crowds of frantic relatives waiting near the school as Russian special forces moved in.

It was unclear what had triggered the battle, a few hours afterRussia insisted it would not resort to force to free the children,parents and teachers being held hostage for a third day.

Alexander Dzasokhov, president of the republic of North Ossetia,said the 40 or so masked gunmen were demanding an independent Chechnya, the first clear link between them and the decade-long separatist rebellion in the neighboring Russian republic.

Earlier, the special forces had blown a hole in a school building to aid the hostages. Witnesses, who stood around 150 meters away from the school, saw three armored personnel carriers with heavily armed soldiers on board approaching the school.

The hostage crisis came after Russia suffered a series of terrorist attacks over the past week.

An explosion near a metro station Tuesday in northeast Moscow killed 10 people and injured 37 others. The explosion came after Sunday's presidential election in Russia's Chechen republic, in which Kremlin-backed Alu Alkhanov won a landslide victory to replace pro-Moscow Akhmad Kadyrov who was killed in a terrorist bomb blast on May 9.

Just five days before the election, two Russian passenger planes crashed almost simultaneously, killing all the 90 people aboard. The incidents aroused fears that terrorist attacks were behind the tragedies.

A group called the "Islambouli Brigades" have claimed responsibility for the twin crashes and connected the crashes to the situation in Chechnya.

Russian President Vladimir Putin said Tuesday that an al-Qaida link to the crashes confirms a connection between Chechen rebels and international terrorism.

Chechnya, a war-torn republic in Russia's Northern Caucasus, won de-facto independence in 1996 after the pullout of Russian troops.

But federal soldiers returned to the lawless republic in September 1999 and followed by a guerrilla war between Chechen rebels and federal troops, occasionally spilling into neighboring regions.

On Wednesday, Putin said the government is prepared to hold talks with all forces in Chechnya, except terrorists and separatists.

"There can be no dialogue with those who wanted to fight and who made war a way of earning money. We shall fight against them, throw them in prisons and destroy them," the Russian president told journalists from leading Turkish media outlets following an interview with a Turkish television company.