In February 1996 with the support of Abdul-Vahed Niyazov, Khachilayev headed the Union of Muslims of Russia, replacing the mufti Mukaddas Bibarsov.

[8] In 1996, he accompanied the Secretary of the Security Council of Russia Alexander Lebed during his peacekeeping trip to Chechen separatist leaders.

[9] Khachiliev was ideologically a supporter of Pan-Caucasianism and Pan-Islamism, being among the leading advocates for the unification of the North Caucasus under an independent Islamic state alongside Movladi Udugov and Zelimkhan Yandarbiyev.

[10] In 1996–1997, when Egyptian Islamic Jihad members Ayman al-Zawahiri, Ahmad Salama Mabruk and Mahmud Hisham al-Hennawi were detained in Makhachkala, Dagestan, Khachiliev was an advocate of their release.

On 21 May, at a rally gathered by supporters of the Khachilayevs on the central square of Makhachkala near the building of the State Council, there was another shootout with police officers.

[7] However, Khachilaev's lawyers stated that he was detained in Moscow, where he arrived at the invitation of the FSB to negotiate his mediation in the release of General Gennady Shpigun, who was abducted in March 1999 and was held captive by Islamists.

[9] In June 2000, Nadirshakh and Magomed Khachilayev were found guilty of organizing hostage-taking and illegal possession of weapons and sentenced by the Supreme Court of Dagestan to 18 months and 3 years in prison respectively and 41,000 rubles in a fine.

Operatives seized weapons and ammunition found in Khachilayev's house, as well as video tapes of abuse of Russian Army servicemen.

Among the versions of the murder were the alleged return of Nadir to politics, as well as blood feud: in May 1998, five OMON servicemen had been killed in a shootout near Khachilayev's house.