Russian President Boris Yeltsin sacked Prime Minister Sergei Stepashin for his security chief, Vladimir Putin. It is the fourth time Yeltsin has changed his government in 17 months. Margaret Warner leads a discussion of the latest changes.

LINDSEY HILSUM, Independent Television News: This is the man Boris Yeltsin says should lead Russia in the 21st century. Vladimir Putin is head of the new KGB. He's not a person Russians know, let alone love, but today he's prime minister, tomorrow maybe president.

BORIS YELSTIN, president of Russia: (speaking through interpreter) Now I have decided to name a man who is, in my opinion, capable of uniting society, based on the broadest political forces, to ensure the continuation of reforms in Russia.

LINDSEY HILSUM: As parliamentarians muttered, one commentator described Mr. Yeltsin's designation of his heir apparent as a "normal surprise," while several politicians said it was just lunacy.

BORIS NEMTSOV, Former Deputy Premier, Russia: I think this is very, very big mistake for Kremlin and one of the consequences of such decision is the disintegration of the country.

LINDSEY HILSUM: This is Russia's sixth change of prime minister in 18 months. Chernomyrdin, Kiriyenko, Chernomyrdin again. Primakov was the last hope for stability, then he was pushed. Now Stephashin has gone. Can today's man, Mr. Putin, stay standing? He has no constituency outside of Russia's security apparatus. But today he denied that he'd use it to retain power for himself and his political godfather, the quixotic Boris Yeltsin.

VLADIMIR PUTIN, Russian Prime Minister: (speaking through interpreter) There is no reason whatsoever to insinuate that there will be a rule of force or forceful measures of which the country will become a victim. All elections will happen as scheduled according to the constitution.

LINDSEY HILSUM: Why all this now? Maybe because of the mayor of Moscow, Alexander Luzhkov. He's spent years trying to gain popularity. Last week he teamed up with regional governors to form a powerful anti-Yeltsin alliance ready for presidential elections next July.

While the politicians maneuver in Moscow, the country's burning. Muslim separatists in Dagestan are ever bolder and more violent. It's an echo of the war in Chechnya, where thousands of Russian soldiers were killed. And it's getting worse. The outgoing prime minister, Sergei Stepashin said today there was a real danger that Russia would lose Dagestan.

ELIZABETH FARNSWORTH: Margaret Warner takes the story from there.

MARGARET WARNER: For more on this latest shakeup in Moscow, we turn to Marshall Goldman, director of the Center for Russian Studies at Harvard University and Professor of Russian Economics at Wellesley College; Lilia Shevtsova, senior associate at the Carnegie Endowment for International Peace, working out of its Moscow and Washington offices. She's the author of the recent book, Yeltsin's Russia: Myths and Reality; and Allen Weinstein, president of the Center for Democracy, a nonprofit foundation-- he was in Moscow earlier this summer. He's also the author of The Haunted Wood: Soviet Espionage in America.

Marshall Goldman, as we just saw, as we all know, this is the fourth time Boris Yeltsin has fired his prime minister in the last 18 months. Why this time?

MARSHALL GOLDMAN, Wellesley College: Well, why not? I mean, you know, I spoke to one of my Russian friends today and they said it's "normalnon" [ph]. Yeltsin is predictable in the sense that he's going to do these unpredictable things. There are all kinds of reasons. I think has your report said from Moscow, the coalition that was just created by Mayor Luzhkov is very threatening to them. It does look like for the first time now the Yeltsin line will be broken. And they're worried about charges of corruption, of stealing, of different things. And this is a way to kind of put somebody out to try to make some stance for Yeltsin.

MARGARET WARNER: I'm sorry, let me interrupt you. Explain that about the charges of corruption and why having a new prime might protect President Yeltsin.

MARSHALL GOLDMAN: Well, one of the things that Luzhkov has threatened to do is to go out after some of the people that surround Yeltsin - Boris Berezovsky, for example, one of the oligarchs. He has until recently been under indictment by the government under Primakov. So there's worry. And there's also worry about Yeltsin himself. There are charges that he has accounts that have been set up for him in Switzerland, the attorney general in Switzerland will come back from a vacation in a day or so and may announce that. There are also some concerns that the administration of the government has signed large contracts for the building, rebuilding, of the Kremlin, of the White House, after it was shelled, and that a lot of money was thrown back this way. So there's great concern here.

MARGARET WARNER: Allen Weinstein, what would you add to that in terms of what Yeltsin's thinking might have been in doing this?

ALLEN WEINSTEIN, Center for Democracy: Several factors. I think, first of all, as Marshall said, he's very concerned about this emerging coalition, because it's a coalition of -- called a moderate nationalist. You've got Luzhkov, you've got the regional governors, people of power, but you also have the figure on the carpet, namely former Prime Minister, Yevgeny Primakov, who could very well emerge as the presidential candidate of a broad scale coalition, including many of Yeltsin's previous supporters. In fact, Yeltsin has managed the extraordinary feat, it seems to me, of unifying virtually every force within Russian political life in an anti-Yeltsin mood of one sort or another. And so at this stage in the game, poor Former Prime Minister Stephashin has had very little choice. But I don't think Mr. Putin has the last word on this. I think, in fact, his major assignment is to bring the regions back under control before the Duma election in December. And I don't think he can do that.

MARGARET WARNER: Why would having a new prime minister help Boris Yeltsin withstand this political onslaught from this new coalition, this new alliance?

LILIA SHEVTSOVA: Well, the most important problem is that Yeltsin's regime, we called it elected monarchy in fact.

MARGARET WARNER: Elected monarchy?

LILIA SHEVTSOVA: Yes. This regime can survive only through constant reshuffles, irrespectively who is prime minister. He's doomed if he's strong, and he's doomed if he's weak. So Stephashin was doomed because he wanted to be neutral. He wanted to stay above the fray, and he wanted to get his own political base. The moment he got his favorable approval reaching six percent, he was doomed. The problem was time. And of course Putin will be doomed. If he is too weak, he is doomed -- if he is too strong. This is the trap of the regime that Yeltsin created.

MARGARET WARNER: Marshall Goldman, tell us about Vladimir Putin. One view agrees doom, but who is he? Tell us a little more about him.

MARSHALL GOLDMAN: Sure. He had served as an agent of the KGB in Germany for many years. But then on the positive side, at east from my point of view, he came back to St. Petersburg - still then Leningrad -- and was part of the reform movement that formed under Mayor Sobchak. Then he actually became the deputy mayor and was invited to Moscow. So there was the good side. But then the bad side is he was part of this organization that was administering Kremlin property. So he may be associated with some of the people that will be criticized and found guilty in Switzerland. Then he was put in charge of the KGB and then he was also made the head of the Security Council. That's why he had contact, as your report earlier said, with the American government with Sandy Berger, the counterpart there. So he's got some good sides, he's got some bad sides from our point of view. But he is unknown. And will he be strong enough to move ahead? I should add one other thing. This goes back to what Lilia said, he did also work -- he was also in charge of the governors of the different regions and he was known as the "gray cardinal" to some extent and was considered to be very strong. So maybe they think he can reign in some of the regional governors this way to help Yeltsin gain that stature. I'm doubtful, but that's what they hope.

ALLEN WEINSTEIN: Can I add two points briefly? Everything Marshall said is correct. First of all, the last three prime ministers have been from the intelligence community, Mr. Primakov, Mr. Stepashin and now Mr. Putin. And presumably the fourth one -- the next one will be as well. I think, Margaret, if we had Mrs. Putin here, we would learn more about Mr. Putin than any of us know at this stage in the game in terms of his plans for Russia. But he has to rein in the regions, and then there is another dilemma he faces, because at some stage in the game, and Boris Nikolayevich Yeltsin decides, well, perhaps he can't afford to give up power, there is still Mr. Lukashenko; there is still the potential of a treaty with Belarus in which you get this weird concept -

MARGARET WARNER: The President of Belarus.

ALLEN WEINSTEIN: The President of Belarus -- the dictator of Belarus at this stage in the game -- and you get this weird concept of a union which will allow Yeltsin to run for the presidency of the partially reunited Slavic lands. And it's bizarre, but I don't think any of us can fully rule it out given everything else that's happened in the last several months.

The transition to a post-Yeltsin Russia

MARGARET WARNER: What do you think? What does this tell but the prospects for this transition to a post-Yeltsin Russia which was supposed to take place next year?

LILIA SHEVTSOVA: Well, appointment of Putin for me is an unpleasant sign simply because the Kremlin family corporation does not care about anything, does not care about how - you know, what kind of image they are creating, and if they do not care about anything, it means only one thing, at least for Russians, that probably they decided desperately to stick to power and to use all means to be the Kremlin, with Yeltsin, without Yeltsin. You know, appointment of Putin, a person without any kind of political base, without any kind of -- some kind of evident ideological views, the person is insignificant, that's why he has been chosen probably, simply demonstrates the Kremlin corporation may even use the extra-constitutional means to stay in power.

MARGARET WARNER: So you don't take Putin at his word when he said today, you know, "all elections will happen as scheduled according to the constitution."

LILIA SHEVTSOVA: Nobody in Russia takes somebody upon their words -- not even Yeltsin himself.

MARGARET WARNER: Marshall Goldman, how do see this - that issue?

MARSHALL GOLDMAN: Well, I think it's an important one. It may very well happen that KGB does begin to maneuver. But - you know -- I think what they think they can do is to use the media, the control of the media because Berezovsky, this oligarch that I referred to earlier, has just bought a new newspaper, controls the television. And they look back at what happened in 1996 and they see that they controlled the media and they kind of rescued Yeltsin, who was below 10 percent in the polls in January. And then by the time the election was finally held, he had 53 percent of the vote. And I think they can kind of craft, create an image, as it were, of Putin who would be strong enough to carry on this way. Let me add just one other thing, by the way. It's true that three of the last four prime ministers were associated with the KGB. But Kiriyenko, as far as we know, wasn't. That's just a small footnote, but I do think that Putin will have to be created and there is no political body there to support him.

MARGARET WARNER: Go ahead, though I have I a question for you yet.

ALLEN WEINSTEIN: Okay. But Yeltsin is terrific of co-opting people. And one of the things we have to look for now is the possibility of a rapprochement with Primakov, because if, in fact, Yeltsin - one of the things he'll have to do in the presidential election is to break away a credible candidate. Mr. Putin is certainly not a credible candidate. And that may yet -

MARGARET WARNER: So even though the new alliance wants Primakov as their candidate you're saying Yeltsin -

ALLEN WEINSTEIN: Yes. I don't think with Marshall that the media is somehow or other going to transform this election the way it did earlier because earlier Yeltsin had a greater body of support within the Russian -- the center of Russian politics and Russian voting constituencies. At this stage in the game, the disillusionment is virtually universal.

MARSHALL GOLDMAN: What else are we going to do?

MARGARET WARNER: Should it? Is there cause for concern or alarm?

MARSHALL GOLDMAN: Well, there has to be. There has to be.

MARGARET WARNER: From the West's perspective.

MARSHALL GOLDMAN: Sure. Sure - because first of all, you don't want to invite the prime minister to this country to meet with Al Gore because he goes home and he's going to be fired. That's what happened to Stephashin and in a sense to Chernomyrdin as well. But - you know -- here they were talking about trying to move forward with arms control agreement - Salt II, Salt III. Now that's all in limbo. And look at the Japanese. The Japanese were hoping to reach some kind of understanding about the islands. That's in limbo. How can you deal with somebody who -- the Russians call it Russian Roulette. You know - you don't know who is going to be in the gun next. And you can't make policy this way, and you can't invest and it hurts the stability there.

MARGARET WARNER: What do you think the international implications are of this, if any?

LILIA SHEVTSOVA: Well, there can been international implications, simply deepest distrust for anybody sitting in the Kremlin and simply wait and see tactics. Everybody is waiting for Yeltsin to be gone. But here is an illusion. Yeltsin is not our major problem. The major problem is the regime and he's hostage of this problem, and he's hostage of the illusion there might be a successor. Yeltsin can have no success at all. Even if Putin is elected president, he will try to consolidate his power by distancing himself from Yeltsin.

ALLEN WEINSTEIN: There's an immediate problem and that is called Kosovo. And you have Russian troops in Kosovo now. You have - in fact -- a leader of the Russian Duma going to Serbia to gather information now to indict NATO at the international criminal court. You have hostility on the part of the Russian military toward the behavior of the NATO forces in Kosovo and one hopes a flash point doesn't emerge, but given the volatility of Kosovo, that, to me, is almost the immediate trigger for something that nobody wants but that could escalate quickly.

MARGARET WARNER: Marshall Goldman, do you see that as a danger?

MARSHALL GOLDMAN: Yes, I do. I think it's a possibility. I wouldn't rank it higher. I think right now in fact the greater danger for the Russians and indeed for the international community is what's going on in Dagestan, Chechnya, and in Gozetia [sp?]. If those areas unite, create a fundamentalist Muslim, Islamic republic there's going to be bombing. It wasn't good under the Chechen War - during the Chechen War, and the world community cannot stand by and watch what took place there. And that's what, of course, the Russians were so worried about when they were criticizing what was happening in Kosovo. Will the West, will NATO decide it should be the policemen in Russia as well? And there I agree with Allen that it could be really a very serious international issue.

MARGARET WARNER: In your book you have a phrase: "Russia's unstable stability." Do you think Russia is politically unstable?

LILIA SHEVTSOVA: I think Russia is strategically very unstable because Russia still has a choice where to go and Russia is before a dilemma -- whether to return to the attempts to effectively implement liberal democracy or find consolidation of the power through the crush of tryanny. This is a big question for Russia still.

MARGARET WARNER: All right. Well are thank you all three very much.