In this image taken from TV Russian NTV channel on 21 Jul 2010, smoke rising from the Russian hydropower station in Kabardino-Balkariya

Militants stormed a hydroelectric plant in southern Russia Wednesday, killing two security guards and setting off explosives in what is being called a terrorist attack.  The incident underscores a growing threat in the region.

Assailants armed with guns and explosives burst into the Baksanskaya power plant around dawn.  They set off a string of bombs that damaged equipment in the machine room and started a fire that authorities rushed to put out.

The company says two turbines were destroyed and the facility has been shut down.  But officials say electricity is still being supplied to the region through nearby power plants.

The attack occurred in Kabardino-Balkaria, a republic in Russia's volatile North Caucasus, where authorities have been confronting an Islamist insurgency.

Senior Correspondent Andre de Nesnera discusses Caucasus violence:

 
Militants in the region have been blamed for near-daily attacks in the area as well as suicide bombings in the Moscow subway last March.

Alexander Konovalov head of the Moscow-based Institute for Strategic Assessments says Wednesday's attack served two purposes.

He says first, it was a strike against the local authorities, who militants see as being too loyal to Moscow.  Second, it attracts attention and shows the groups have the ability to attack a major power station.

Russians were awoken to the threat posed by the destruction of a hydroelectric plant last year, when a major accident at the Sayano-Shushenskaya dam in Siberia threatened the lives of millions of people downstream. 

Earlier this month, Russian Prime Minister Vladimir Putin announced a new strategy to confront the causes of violence in the North Caucasus by focusing on efforts to improve economic conditions in the region.

In the meantime, officials from Kabardino-Balkaria told President Dmitri Medvedev that steps are being taken to tighten security at other strategic facilities in the republic.

Moscow fought two wars against separatist rebels in neighboring Chechnya in the 1990s.  Militants have long vowed to target Russia's economic infrastructure, including pipelines and power stations.