American and Russian economic and security interests are in the crosshairs of Al-Qaeda-connected Chechen insurgents. These interests have been greatly compromised in the aftermath of the hostage-taking crisis in Moscow last October. At stake is the future of energy projects and safety of weapons of mass destruction, nuclear reactors, Eurasian oil pipelines, tanker traffic in the region and U.S. investments in the Russian and Caspian oil fields—as well as civilian air traffic. After all, Chechens are masters of using shoulder-launched Strela SA-7 missiles to bring down Russian military helicopters, and nothing will stand in their way if they decide to attack Russian and Western civilian jets—just like Al-Qaeda recently tried to do in Mombasa, Kenya, against an Israeli airliner full of vacationers.

The scale and brutality of the event is reminiscent of massive hostage taking by Chechen militants in Budennovsk and Pervomaisk during the first Chechen war. President Vladimir Putin has been using rough jokes about circumcision and castration of those who are concerned with the human rights situation in Chechnya during his recent trip to Europe. But in reality, there is nothing funny in the aftermath of the hostage taking, in which at least 120 hostages died, most of them from the overdose of a "non-lethal" gas used to incapacitate the terrorists.

From now on, both sides are likely to escalate the use of force, including attacks on innocent civilians. The Chechens’ target list has become more deadly. Chechen "Vice President" and a former senior field commander Ahmad Zakaev, arrested in Denmark and later in Great Britain, warned that the next operation might involve a nuclear reactor – something that Al-Qaeda has considered in the United States. President Aslan Maskhadov stated that similar operations might continue if peace talks are not forthcoming.

President Vladimir Putin has warned that the Chechens may use arms "comparable" with weapons of mass destruction, and implied that Russia may respond in kind. A review of the Russian military doctrine in Chechnya is underway. It is clear that neither the regular military nor the Interior Ministry troops nor security services are capable to achieve a quick military solution, while the leadership has ruled out a political settlement, at least for now.

Professor Stephen Blank of the U.S. Army War College wrote recently that Russia’s use of a highly potent gas (albeit not a prohibited chemical weapon)—as well as Chechen threats to use dirty bombs and chemical weapons -- might pave the way for the Chechens and the Russians to use weapons of mass destruction in the future. A senior Russian nuclear regulator, Yuri Vishnevsky, the head of Gosatomnadzor, the Russian equivalent of the U.S. Nuclear Regulatory Commission, has recently declared, that unspecified amounts of weapons grade or reactor grade nuclear material have disappeared from the Russian nuclear facilities. They could have made their way into the hands of Chechen or international terrorists.

Media reports of missing cesium-137 and strontium-90, as well as more common uranium 235 and plutonium, have proliferated over recent weeks. A dirty bomb is more likely to be deployed by Chechens than a regular nuclear warhead or a miniaturized nuclear demolition device, says Rose Gottemoeller, a Senior Associate at the Carnegie Endowment for International Peace and the former Assistant Secretary of Energy for Non-proliferation. Chechen Islamic militants may also be instrumental in providing such devices or materials to produce them to Al-Qaeda. A dirty bomb, exploded in oil fields, may put them out of commission for hundreds, if not thousands of years.

Russia’s inability to prevent the terrorist attack and to neutralize its architects has raised questions about efficiency of the Russian security services. Russian security experts raised serious questions regarding the poor performance of the Russian secret police (FSB), which failed to prevent the penetration of 40-50 Chechen fighters with over 100 kilograms of high explosives to Moscow.

Al-Qaeda’s second-in-command, Ayman Al Zawahiri has recently warned that U.S. and Western economic interests are in their crosshairs. Many in the Arab Gulf states have viewed negatively growing oil output from Russia and the Caspian Sea fields, including Azerbaijan and Kazakhstan. These circles would be happy to destabilize Russia and the Caspian basin which is viewed as an alternate (albeit modest) source of oil for the world market.

The model for disruption of oil shipping by Al-Qaeda has already been established. On October 6, a light boat loaded with close to 1,000 pounds of high explosives rammed Limburg, the French supertanker transporting 390,000 tons of Saudi crude off the coast of Yemen. Washington experts and oil executives are concerned about mega-terrorist attacks on the Tenghiz-Novorossiysk Oil Pipeline (CPC) operated by Chevron, against Baku-Novorossiysk pipeline, against the ports of Novorossiysk, Tuapse and Supsa on the Black Sea, or against the Tbilisi-Ceyhan pipeline currently built by a consortium led by British Petroleum.

It remains an open question whether the regional states alone can provide overall security to ensure economic development in the region.