Security officials say that, so far, one soldier has been killed and eight troops injured in fighting in the mountainous Untsukul district. Initially two soldiers had been reported killed in the clash which began early on 3 January. The operation was suspended at nightfall.
Up to five militants are also believed to have been killed in the fighting, which involved troops from the Interior Ministry and from the regular army backed by helicopter gunships.
Police said the armed group had entered Daghestan from Chechnya. The Daghestani interior minister, Adilgerei Magomedtagirov, is in charge of the security operation.