MOSCOW (Reuters) - Russia said on Thursday it was having to rethink how to dislodge Moslem rebels from mountain villages in strife-torn Dagestan but hailed what it called the achievement of its strategic goal. It said it had lost 40 men in 14 days of fighting the rebels in the North Caucasus region of Dagestan, a strip of land on the west of the Caspian Sea. It put guerrilla dead at 400-500. The rebels called Russian statements „100 percent lies“. „Today we can say our strategic goals have been reached,“ Deputy Interior Minister Igor Zubov told a news conference after returning from the battle zone in mountainous territory between Dagestan and neighbouring rebel republic, Chechnya. He said Russia stopped the rebels, led by battle-hardened fighters such as Shamil Basayev, who masterminded Russia‘s defeat in the 1994-96 Chechen war, from reaching their goal of a separate Moslem state in Dagestan. He said the rebel forces had been disbursed into small units, which were engaging in partisan warfare. At the same time he acknowledged that operations to dislodge the rebels from inaccessible mountain villages were not being successful and that Russia was having to rethink. „The use of artillery and air strikes and other types of weapons which are in situ is not effective enough,“ he said, adding that rebels had fortified positions on the hills around the villages, which nestled in long, narrow valleys. „They could be taken by a direct assault but it would bring big losses,“ he said. „Therefore…I must say we have decided to make sure our losses come to a minimum.“ Russia on Wednesday tried an abortive attack on the village of Tando, which the Defence Ministry said claimed four of its soldiers, although the figure was originally put at eight. Zubov said troops were regrouping after the failed assaults and would concentrate on destroying rebel communications and supply routes and carrying out „anti-terrorist operations“. He said that including Wednesday‘s Tando operation, Russia had lost around 40 dead, with 160 wounded in the fighting so far. Three helicopters had been destroyed. Up to 500 rebels had been killed, he added. There are also volunteer Dagestanis fighting on the Russian side and Zubov said around 2,000 of these had been armed with hunting rifles by the federal forces. The rebels continued to dispute the Russian claims, saying that they still controlled strategic heights and that Moscow‘s statements about battle- field success were lies. A Russian Interior Ministry spokeswoman in Dagestan capital Makhachkala said at least 50 rebels had been killed in a flurry of air strikes. She said the strikes, carried out over the past couple of days in the area of Tando, had also destroyed storage facilities and fuel supplies belonging to the rebels.