The government is offering a $10 million reward for the capture of the people responsible for planning the North Ossetia school massacre. The guy behind this is believed to be Shamil Basaev, but no one is sure. Large rewards like this sometimes work, but often does not. In Chechnya, the problem has been the lack of trained, professional police and troops. Only recently have the Russians decided to stop sending young conscripts to Chechnya, and only use well trained and equipped professionals. But that won't eliminate the climate of corruption that has led to the theft of the aid money meant for reconstruction, and the widespread theft and kidnapping that is practiced by Russian forces.
With oil prices so high for so many years, Russia has a lot of money to apply to the problems in the Caucasus. But the solution isn't financial, it's one of leadership. Every once in a while, leaders come along in Russia that change the fundamentals. The communists made a lot of negative changes (more corruption in the military and police, for example). Someone in Russia is going to have to change the way the troops, and security forces, operate if they are to shut down the terrorist attackers.