BUDYONNOVSK, Russia (AP) _ The shooting began abruptly, tearing into the darkness and sending a rolling echo across the town.

Within minutes, single shots and occasional rounds became an incessant cannonade _ light weapons, machine guns and grenades sounded all at once, as if glad to finally break the eerie quiet of Budyonnovsk.

The roar of battle was coming from the direction of the hospital, where scores of Chechen rebels were holding an estimated 2,000 civilian hostages.

The streets, mostly deserted since the Chechens ruthlessly stormed the city Wednesday, were empty. The little houses surrounded by gardens and fruit trees stood defenseless against the morning sun and the fury of combat.

At times, residents would step out from behind their metal fences listening to the shots. Closer to the hospital, small crowds gathered on street corners _ mostly disheveled men who offered comments on the fighting.

Some women were crying. In a city of 100,000 people, nearly everyone has a relative, friend or acquaintance among the hostages.

The air shook with the sound of guns mounted on light tanks. A sinister whistling sound indicated a shoulder-launched rocket was fired.

On the outer ring of the siege, the most troublesome thing was a Chechen sniper hiding just outside the hospital perimeter. His shots were loud and clear.

A few soldiers moved forward, taking cover behind buildings and fences, promising to wipe him out. The familiar dry click of his shots came almost immediately, followed by a loud explosion.

``That's the Kid _ he fired a grenade,'' said a soldier resting in the shadow of a tree.

The Kid missed, and continued to shoot until subdued by a heavy machine gun.

Black smoke came from the second-floor windows of the hospital's main building, and red flames rose behind the trees.

Hostages stood in the windows waving bedsheets _ human shields placed there by the Chechens. During lulls in the fighting their cries and shouts were heard; ``Don't shoot! Don't shoot!''

But elite Interior Ministry troops and armored vehicles continued to advance toward the hospital. One armored personnel carrier, hit by an anti-tank grenade, burst into flames, exploding into a bright fan of burning ammunition sparks.

By day's end, the hospital building was burning heavily. Hundreds of hostages remained inside. About 150 hostages were freed by the Chechens and several dozen by the Russians.

The Chechens reportedly lost 10 men, the Russians a handful. Negotiations failed to reduce results. Troops were digging in for the night.