Russian forces continued their bombardment of the Chechen capital Grozny.
As the noose tightened, the West called for a ceasefire, but Russia refused and the Chechens continued their resistance.
A tragedy of another sort struck Venezuela, when floods caused massive mudslides. Up to 50,000 people were feared dead.
Nearly 160 passengers were freed from a hijacked Indian plane which had been flown to Afghanistan by hijackers wanting the release of Kashmiri militants from prison in India. Three militants were freed and the hijackers escaped.
In the UK, there was uproar when the European Court of Human Rights ruled that the trial of the two boys convicted of the 1993 murder of toddler James Bulger had been unfair. The British Government accepted the need for legal reform, but opposition politicians and much of the public were up in arms.
There was more anger when the European Union announced fishing quota cuts in an attempt to conserve stocks for the future.
Northern Ireland took control of its affairs for the first time in 25 years when power was devolved from Westminster and the IRA made its bold move towards finding a lasting peace by beginning talks on decommissioning weapons.
The feel-good factor did not last long. Sinn Fein president Gerry Adams accused the British government of a 'hugely serious breach of faith' after claiming that military intelligence had bugged his car.
The farce surrounding the selection of the Tory candidate for Mayor on London continued when Steven Norris was dramatically reinstated after being left off the post-Archer scandal shortlist.
A long-running court case came to a conclusion when Neil Hamilton's libel action against Mohammed al-Fayed ended in victory for the latter. Mr Hamilton, a former Tory MP accused of corruption, was left "stunned, devastated and broke" by the verdict.
An inquiry was opened in Liverpool when it was revealed a hospital had removed and stored organs from dead children without the parents' consent.
Germany reached agreement with the US to pay $5bn to people forced to work as slave labourers for the Nazis in World War II.
UK opera fans welcomed the reopening of the Royal Opera House in London's Covent Garden after a £214m refurbishment project which took 16 years to complete.
Paul McCartney returned to the Cavern Club in Liverpool to give a concert in front of 300 lucky fans. It was the first time he had performed there since a Beatles concert 25 years previously. Cynics suggested the trip down memory lane was merely an attempt to sell his new album.
Another ex-Beatle, George Harrison, made the news for an altogether more unpleasant reason when he and his wife were stabbed in their Oxfordshire mansion.
A row erupted over the redevelopment of Wembley Stadium when the Culture Secretary, Chris Smith, ruled the design was not suitable for Olympic athletics.
And the final day of the year, the century and the millennium saw one of the more controversial international leaders of recent times, Boris Yeltsin, step down early as president of Russia in favour of his annointed political heir, Vladimir Putin.
World: US and Cuba re-start charter flights
World: Martin Luther King 'victim of vast murder conspiracy'
UK: Tory spokesman sacked over gay legislation
Business: AstraZeneca and Novartis announce $10bn merger
Sport: Australia win tennis's Davis Cup
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