Khalilov and a second fighter, Naby Nabiyev, were killed after Russian tanks razed the house from which the two men had engaged in a 12-hour battle with Russian and Daghestani Interior Ministry troops. Both bodies were reportedly recovered from the ruins.
Vyacheslav Shanshin, the head of the FSB's Daghestan directorate, said the September 17 confrontation was the culmination of a extended operation to track down Khalilov.
"The special operation was the logical conclusion of a set of investigative operations that had been carried out by the relevant structures of the Federal Security Service. This was a long process, more than just a year, and, as a result, it became possible to find Rappani Khalilov's location in the Republic of Daghestan," Shanshin says.
Russia considers Khalilov the prime suspect behind a number of attacks, including the May 2002 bomb attack on a Russian barracks in the Daghestani town of Kaspiisk, in which 45 people were killed.
Khalilov, who had ties to Chechen rebel commander Shamil Basayev, was last year named by Chechnya's separatist leader, Doku Umarov, as the commander of the Daghestan front. Basayev was killed in June 2006 in an operation by Russian special forces.
Journalist and Caucasus expert Ivan Sukhov told RFE/RL's Russian Service that Khalilov is considered one of the most influential of the North Caucasus's underground leaders. "Rappani Khalilov, if I may say so, was the No.1 star among the field commanders of Daghestan's underground. If information about his killing is true, then this is comparable with news of Shamil Basayev's death in Chechnya. Khalilov's name and reputation was indeed comparable to that of Basayev," Sukhov says.
This is not the first time Russian media has announced Khalilov's death. This time, however, authorities appear confident of the claim, releasing details about the operation and photographs showing bodies being pulled from the rubble of the razed house in Novy Sulak.
Daghestan's prosecutor, Igor Tkachev, said today that Russian antiterrorism law prohibits returning the bodies of Khalilov and Nabiyev to their families.
"Since both militants were eliminated when they were committing a terrorist attack, their bodies, in line with federal legislation, will not be given to their relatives," Tkachev told Interfax.
Unrest in the North Caucasus republics has been on the rise, with violence flowing beyond the continuing conflict in Chechnya. Sergei Markedonov, an expert at Moscow's Institute of Political and Military Studies, says Khalilov's death, while significant, will not improve regional security, as his role will quickly be filled by others.
"It's very clear that the elimination of Rappani Khalilov, or any other militant, is not going to make the situation in North Caucasus more stable or secure. For this, systematic measures from the government are needed -- so that the situation really becomes more stable. Elimination of a random guerrilla fighter, mastermind, or militant is not going to solve the situation," Markedonov says.
Markedonov says much of the unrest in Daghestan is that the republic's inhabitants do not see themselves as enjoying full rights as Russian citizens.