There have not been many times in this city's troubled history that Grozny can boast being a haven of peace and normality while much of the rest of the Caucasus is gripped by conflict and strife.

But for once this city, which means "terrible" in Russian, has shaken off its reputation for violence and destruction. Today it is undergoing an extraordinary transformation. In the space of only three years, and at a cost of billions of pounds in Russian aid, Grozny is rising from the ashes.

Where once the ruins of the former presidential palace stood, now there is a public square with well-tended flower beds. Across the street a destroyed hotel has vanished and in its place workmen are putting the final touches to a giant new mosque, the largest in Europe according to its builders.

Visitors to the city in the 1990s learned to take cover from mortar fire or air strikes, run across open streets to avoid snipers and generally give trigger-happy Russian patrols and hostage-taking Chechen rebels a wide berth. Back then the city changed hands five times in less than a decade as the Russian army and Chechen separatist rebels battled for control of the capital. The Russians finally won but inherited a city in name only.

Today it is hard to match those vivid memories with the new Grozny, a bustling capital of nearly half a million with new housing developments and schools mushrooming between the devastated buildings heavily overgrown with vegetation.

The crack of rifle fire has been replaced by the sound of cranes and hammers from the army of workmen on construction sites. The only reason to run across the street at Minutka Sqaure, once the most dangerous intersection in town, is to avoid the heavy traffic. Most extraordinary of all is the sight of children in neat uniforms returning home from lessons. As recently as five years ago no children were visible on the streets because their families had either fled the city or they were kept safely indoors.

The man who takes credit for what must rank alongside the rehabilitation of Beirut as one of the greatest reconsruction operations of modern history, is the unlikely Chechen leader President Ramzan Kadyrov, whose heavy-set profile stares down from every public building and billboard. The 31-year-old is a poacher turned game-keeper who once fought for the rebels but then switched sides and became the Kremlin's man after his father, the previous president, was assassinated by rivals.

Mr Kadyrov may have made his name as a tough warlord, feared by his opponents and condemned by human rights groups for his abuses, but he is now attempting to recast himself as a man of peace in a troubled region. He has swapped his combat fatigues for a business suit. To complete the makeover, he now works from a bizarre presidential complex complete with private zoo, water park and race track. Gunmen are kept discreetly out of of sight.

This week he offered an amnesty to the last few dozen rebels still operating in the mountains. He also invited Akhmed Zakayev, a Chechen rebel leader and former Shakespearean actor exiled in London, to return to his homeland and take up a job in the culture ministry.

The talk of peace and reconciliation is in stark contrast to the rest of the region. In neighbouring Ingushetia violence is on the rise. Across the mountain border with Georgia, Russia is locked in a protracted conflict over the breakaway regions of South Ossetia and Abkhazia, which Moscow recently recognised as independent states.

Mr Kadyrov admitted that Chechen forces had taken part in the recent fighting in Georgia and boasted that his men had led the victorious counter-attack against Georgian forces.

"The Chechens were on the frontline," he said. "They know what is war ... They feel what is war."

Depsite the talk of peace, old habits still die hard in the new Chechnya.

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