A slightly updated text based on May Sellars's 19th-century translation of the story about two sisters who not only befriend a bear who's really a prince but rescue—three times—the peculiarly ungrateful gnome (``dwarf'' in other editions) who enchanted the prince and stole his treasure. Of particular interest here is the Russian illustrator's delicate watercolor art, in rich, golden tones and fine detail more often seen in oils. Spirin's traditional composition and style have an old- fashioned appeal; the girls (shown as children; the wedding takes place ``years later'' here) have some liveliness, and the bear is appropriately awesome, but the tiny gnome doesn't have much character. Lush and handsome, but without the storytelling verve of Barbara Cooney's freer illustrations (1965, 1991). (Folklore/Picture book. 4-10)