Russia's FSB intelligence agency said Wednesday 10 rebel gunmen were killed in an early morning shoot-out in the Caucasus republic of Dagestan, reported dpa.
One security agent died and another was injured in the police assault, Dagestan's Interior Ministry said.
"The armed gang got caught in an ambush led by a special task force of the FSB," a spokesman for the agency was quoted by Interfax news agency as saying.
He said police used a grenade launcher to target a minibus carrying the gunmen near the village of Tsmur in the southern part of the region around 1 am Wednesday.
Interfax reported the operation was aimed at stopping the rebel group's leader, Zakir Novruzov, who was killed in the clashes.
The fighting lasted several hours in the wooded area, and police said the men were heavily armed.
Police said they found automatic weapons, explosives, ammunition and religious literature in the vehicle.
Dagestan has been plagued by violence from neighboring Chechnya, which fought three wars with Moscow in the 1990s.
Police have regularly staged crackdowns on Islamist militants and rebel groups in the region.