SHALI, Russia (AP) _ Using the same tactic that pushed rebel fighters out of Grozny, Russian forces pounded southern Chechnya on Sunday with heavy artillery and rockets.

Also Sunday, a newspaper reported the discovery of two open mass graves in the capital of the breakaway republic. The Observer of London said the graves contained the bodies of more than 100 Chechens, most of them civilians, including women and children.

Bodies of the newly dead lay among a far larger number of decomposing corpses in open trenches between Grozny's central graveyard and a main road, the newspaper said. Some were clearly victims of exploding shells while others looked relatively unscathed.

There was no suggestion that the victims had died in a mass killing, rather the graves were an indication of lack of burial space in the devastated Chechen capital.

Survivors of the two-month Russian bombardment of Grozny visit the site in search of missing relatives, the newspaper said.

With the Russians tightening their ring around separatist strongholds, an aide to Chechen President Dzhokhar Dudayev struck a conciliatory note, offering to resume peace talks.

Military aide Musa Merzhuyev suggested that instead of disarming, Chechen rebels could join the Russian army _ a far-fetched proposal unlikely to even be considered by either side.

Meanwhile, about 200 Russian armored vehicles backed by up to 50 tanks surrounded the last Chechen stronghold in southwestern Grozny, rebel fighters told the Interfax news agency.

The Russian government press service also reported a Russian attack on Gudermes and fierce fighting around Argun, two rebel towns east of Grozny.

At the central market in Shali, the new base of forces loyal to Dudayev, vendors traded fruit, chocolate and other goods as shells and rockets shook the ground every few minutes. Fighters lounged in the streets of the city, about 15 miles southeast of Grozny.

A Chechen commander at the new Department for State Security, who would only give his name as Alevi, said his men were holding back Russian forces along the highway north of Shali.

``They will stand there for another year. They will not move forward,'' said Alevi, sporting a vest stuffed full of hand grenades and ammunition clips.

A Russian plane dropped a bomb on Shali on Saturday, killing at least one family.

Ruslan Dukayev, 12, lay asleep in a Shali hospital bed, recovering from shrapnel wounds suffered in the blast. His neighbor Emedi Isayev, 37, whose own son was injured in the attack, said Ruslan had run into the street to look at the plane.

``He said he didn't think they'd shoot at children,'' said Isayev.

The bomb hit Ruslan's home, killing the rest of his family.

On the road to the neighboring village of Stary Atagy, empty save for the occasional speeding car or truck, shells exploded 500 yards away as Russian gunners targeted an old factory works.

Russia sent its troops into Chechnya on Dec. 11 to crush an independence bid in the Caucasus Mountains republic. Thousands of troops and civilians are believed to have been killed.