A density functional for short-range electron-electron interaction recently developed by one of us, has been implemented into a multi-reference configuration-interaction code with explicit treatment of long-range interaction only. Possible advantages of such an approach are discussed, using as examples some closed-shell atoms (Be, Ne) and diatomics (H-2, Li-2, C-2, N-2, F-2). (C) 1997 Published by Elsevier Science B.V.