Daghestan, Russia's North Caucasian republic on the Caspian west coast, borders on Chechnya in the southwest.
"Ghelayev stayed on his own after December last, when his gang was routed. He found shelter in pits and mountain gorges like a hunted-down rat. Local people fed him. His fighters killed off, to go into hiding was the only thing he could do," said the minister.
"Dispersed gangs under Shamil Basayev's and al-Walid's command are still active in Chechnya. A hunt for notorious rebels is on, though it is not so successful as we should like," he added.