Russia says killed top local al Qaeda militant

MOSCOW (Reuters) - Russia said on Wednesday its forces had killed an Egyptian militant in Dagestan who had set up a faction of al Qaeda in the volatile southern region.

"One of the founders of the al Qaeda network in the North Caucasus... and a gunman accompanying him were eliminated as they put up an armed resistance," state TV channel Vesti-24 showed Vyacheslav Shanshin, head of the local FSB, as saying.

State-run RIA news agency, quoting the FSB, the successor to the KGB, said 49-year-old Makhmoud Mokhammed Shaaban had been aided by Georgia, a charge Tbilisi swiftly denied.

Factions of the FSB have repeatedly linked the Islamist insurgency raging along Russia's turbulent, Muslim-dominated southern flank to al Qaeda, and have accused neighbouring Georgia of aiding the militants.

Media identified Shaaban as an Egyptian native who was nicknamed Seif Islam, or Sword of Islam. RIA said he had been active in Sudan, Afghanistan, Libya and Georgia.

Quoting the FSB, RIA said Shaaban had masterminded acts of sabotage to blow up railway tracks, electricity lines and energy pipelines at the instructions of Georgian secret services. Georgia's Ministry of Internal Affairs denied the allegations.

Vesti-24 television showed footage of Shaaban sporting a thick black beard and green camouflage alongside other, heavily armed rebels in Chechnya and Dagestan.

Unofficial Islamist website kavkazcenter.com said Seif Islam had been "participating in the jihad in Chechnya and the Caucasus for more than 15 years".

Political analysts say the Kremlin is losing control over the North Caucasus as violence escalates, mainly in Chechnya, site of two separatist wars since the mid-1990s, and nearby Ingushetia and Dagestan.

In its latest attempt to tighten its grip over the turbulent region, last month the Kremlin appointed outsider and businessman Alexander Khloponin to oversee it.

Relations between Moscow and Tbilisi remain fraught after their brief August 2008 war.