PRESIDENT Boris Yeltsin, making up for two months of near silence on Moscow's war in Chechnya, tried to reassure the world yesterday that Russia is still marching toward reform.
In his first major public speech since war erupted in the breakaway Caucasian republic of Chechnya, Mr. Yeltsin defended his decision to stamp out what he called the ''criminal dictatorship'' in rebel Chechnya.
While justifying the war in his state-of-the-nation address to parliament, Yeltsin also distanced himself from its consequences. He blamed military leaders for ''big losses'' and for human rights violations against civilians.
Seeking to cloak himself in democratic colors, he asserted that a ''criminal world'' posing a ''great danger'' to Russia had emerged in Chechnya since separatist leader Dzhokhar Dudayev declared the small republic independent from Moscow in 1991.
''For too long we hoped that the situation would sort itself out or that a compromise could be reached. That was a fatal error,'' Yeltsin told the packed Marble Hall in the Kremlin.
He tried to equate Chechens with the world's worst criminals. ''An abscess like the Medellin cartel in Colombia, the Golden Triangle in Southeast Asia, and the criminal dictatorship in Chechnya does not disappear by itself. In order to preserve our sovereignty, independence, and integrity, the state can and is obligated to use force,'' he said, adding that force was used in Chechnya only as a last resort.
Yeltsin's presidency has been severely damaged by the Kremlin's military campaign in Chechnya. Yeltsin himself has been criticized for the use of indiscriminate strength in the region, where thousands of civilians have died since the war began.
His speech marked his most intense criticism yet of the military, which analysts say may be facing a reshuffle soon. Defense Minister Pavel Grachev, who has been blamed for much of the debacle, may lose his post.
But as he refrained from announcing any personnel changes, his speech contained nothing unexpected. Observers hoping for comprehensive changes in Kremlin policy were disappointed.
Last week, military sources said that 1,020 Russian soldiers had been killed in Chechnya, but other estimates put the death toll considerably higher.
A 48-hour cease-fire between the warring sides was due to take effect from midnight Wednesday, but there was no indication whether the truce would be observed. Other cease-fire attempts have collapsed within hours.
But in a sign that could pave the way for a lasting settlement, the two sides agreed to begin working together yesterday to remove the dead from the capital, Grozny, according to Col. Gen. Anatoly Kulikov, the Russian commander in charge of the Chechen operation.
Russian news reports said General Kulikov also suggested creating a demilitarized zone inside Grozny, which has been almost completely destroyed, and for the release of all prisoners of war. The Chechen reaction to the proposals was unclear.
Yeltsin, who called yesterday for a moment of silence to commemorate the war dead, would be among the first to benefit from a solution to the crisis. The war in Chechnya has considerably damaged his reformist credentials in advance of the June 1996 presidential elections.
Known in the West for his dedication to economic reforms, Yeltsin's recent dependence on hard-line aides has brought speculation that an anti-Western policy is emerging in the Kremlin, and analysts fear that Russia may be setting back the clock on the reform process.
But Yeltsin sought to quell such fears in his address. He stressed that strengthening the battered ruble, bringing down Russia's spiraling inflation rate, speeding up privatization, and giving incentives to spur foreign investment and Russian industry were top government priorities.
He also expressed concern over a rising tide of intolerance, criticizing the number of ''fascist'' publications for sale in Russia and accusing the courts of not taking action to thwart the problem.
But in a sign that he may seek to slow reforms somewhat, he said that agriculture and industry needed government protection and that minimum standards should be set for spending on health, the environment, and social security.
He also complained that a ''new poor'' had been created in Russia: people who have jobs but receive either ''miserly salaries'' or no wages at all.
''Nobody -- neither the president, not the government, nor parliament -- has any right to take decisions that undermine the budget and accelerate inflation,'' he said to applause. ''Decisions on minimum wages must be based on the capacity of the budget.''