Russian and US defence officials worked through last night to hammer out a peacekeeping role for Moscow's troops in Kosovo.
The Russian Defence Minister, Mr Igor Sergeyev, and the US Secretary of Defence, Mr William Cohen, were due to meet for a third day of tough negotiations this morning in the Finnish capital, Helsinki.
Officials on both sides said last night that good progress had been made, with Russia's demand to control its own sector in Kosovo believed to be the main sticking point. "We have resolved a lot of outstanding issues, but we have not yet finalised an agreement," Mr Cohen told reporters outside Finland's presidential palace.
President Clinton will join leaders of the G8 nations - the US, Britain, Germany, France, Italy, Canada, Japan and Russia - where it had been hoped an agreement with Russia could have been be ratified.
Yesterday, President Clinton declined to go into details on what had seemed to be an emerging agreement, but said there was "may be one issue, maybe two to resolve". He added that a deal nee ded to be worked out with Russia because the allies wanted to concentrate their energies on rapid, comprehensive deployment.
NATO wanted to "work on building the institutions of civil government in Kosovo that will treat all the citizens of Kosovo in a fair and equitable way . . . the quicker we get to work on that, the better".
Serb refugees from Kosovo are reported to have inundated the central Serbian towns of Kragujevac and Kraljevo, with many spending the night out of doors, press reports quoted local authorities as saying last night.
"If the influx continues over the next few days Kraljevo will no longer be able to accept them," Mr Radoslac Jovic, mayor of the town of 35,000 inhabitants 150 km south of Belgrade said. Some
10,000 refugees from Kosovo were currently in his town. Meanwhile another 400 arrived in Kragujevac, 120 km south of Belgrade, joining 3,000 already there.
The NATO-led Kosovo peacekeeping force, Kfor, the government in Belgrade and NATO's field commander have all appealed to the Serbians to remain in Kosovo, regarded as a cradle of Serbian culture and religion.
In Washington, US State Department spokesman Mr James Foley said the Serb exodus reflected only the uncertainties of the transitional period as Kfor replaced the Yugoslav military.
"It is our hope and expectation that many of the Serb civilians who have left Kosovo will return to Kosovo, because after all, this is their home too," he said.
However, the extreme Serb nationalist and indicted war criminal, former deputy Yugoslav prime minister Mr Vojislav Seselj, called on Kosovo's Serbs to regroup in eastern parts of the province and fight back.
The World Food Programme estimated up to 50,000 Kosovo Serbs had fled their homes since the ethnic Albanians started to return last weekend. Before the latest surge back into Kosovo, the UN refugee agency UNHCR put the total of ethnic Albanians still outside Kosovo at close to a million.
US officials in Washington said the United States had secretly been in contact with opposition leaders in Serbia to encourage efforts to oust Yugoslav President Slobodan Milosevic, who has been indicted by the UN tribunal as a war criminal.
NATO's supreme commander Gen Wesley Clarke last night said it was unclear if all Serb paramilitaries were pulling out of Kosovo. Gen Clark told the BBC that disarmament in the Balkans of both the Serbs and the Kosovo Albanians would never be complete and was fraught with difficulties.
"It is not clear whether all the paramilitaries have pulled back or not and we will be watching this very closely," he said. "We are never going to disarm everyone in the Balkans, there are weapons buried all over the Balkans." NATO said that more than 26,000 of the estimated 40,000 Serb troops in Kosovo had left the province. Serb troops must withdraw from Kosovo by Sunday night under an agreement between Russia, Belgrade and the Western alllies.
The aid agency Goal in Dublin is urgently seeking motor mechanics to assist with the return of Kosovar refugees to their homeland. The mechanics will be working on the agency's tractor repair programme, which has been stepped up since the withdrawal of Serbian troops began.
The appeal coincides with the arrival of a team of Goal aid workers in Prizren, western Kosovo, yesterday to assess the needs of returning ethnic Albanians.