Russia’s struggle against terrorism has been used instrumentally by President Putin for achieving a range of international and domestic political goals. This trademark instrumentalization, however, has been stretched beyond its limits. The stagnant and deeply criminalized hostilities in Chechnya are now resonating across the North Caucasus; for a long time, Chechnya has been an isolated ‘black hole’–but now it is rather the eye of the storm engulfing the whole region. The Kremlin cannot organize a real public mobilization for this war since it does not have anything resembling a positive program and its own cadres are too infected by corruption to make a sustained effort. The massacre in Beslan in September 2004 momentarily undermined the confidence in Putin’s ‘inner circle’ that continuing the ‘virtual’ war against terrorism was more important than winning the physical one. However, no coherent system of counter-terrorist measures has been implemented and the results of this failure are gradually accumulating. Seeking to use the threat of terrorism for deterring the threat of ‘colored revolutions’, Moscow has arrived to a position where its policies become incompatible with international efforts aimed at advancing stability through support for democracy.