Makhach Rasulov was reportedly killed in a three-hour gun battle when police launched a pre-dawn raid on a suspected rebel hideout.
The firefight also left two police officers dead and a third seriously wounded.
Rasulov was a leading figure in the Shariat militant group, which is held responsible for a string of attacks in the region, including a bombing in July 2005 that resulted in the death of 10 federal soldiers.
Russian media had reported that Rasulov had been killed six months ago.
(Reuters, ITAR-TASS, regnum.ru)