The two Nepalese soldiers were from the 69th Gurkha Field Squadron, part of the British Army contingent controlling the central sector of Kosovo as part of the K-For peace force. Last night, their names had yet to be released.
The troops were clearing ammunition from a school in the village of Negrovce, 20 miles west of the provincial capital Pristina, when the mine or a booby- trap exploded, Nato said. Nato officials said the blast occurred just before 2pm.
Some villagers said the explosion was a terrible accident. They said a group of KLA soldiers, or other locals, had come to the village to help clear up mines. One of the men had collected several in a bag but then tripped and fell over, causing the explosion. Two civilians were also killed in the blast, and a third was injured.
The Prime Minister, Tony Blair, expressed his sorrow. A spokesman said: "He was told the sad news earlier this afternoon and obviously his thoughts are with the brave soldiers and their families."
The death of the two soldiers underlines the dangers faced by the British and their K-For comrades as they attempt to make the country safe for hundreds of thousands of refugees now returning to their homes.
The UN refugee agency UNHCR said yesterday that 137,000 of the 840,000 Albanian refugees are back in their towns and villages. Aid agencies told the refugees to wait until Kosovo was a safer place, but many were eager to get home. Kosova Press, the news service of the KLA, said civilians have been injured by landmines over the past 10 days.
Senior commanders have admitted one of the most difficult tasks confronting K-For is dealing with the threat from landmines and booby-traps left behind by the retreating Yugoslav Army or by Serbian paramilitaries.
Part of the arrangements agreed by Yugoslav commanders and the British commander, General Sir Mike Jackson, before K-For's entry into Kosovo on 12 June concerned a Serb pledge to hand over of information about the location of mines and explosive devices.
Lt-Col Nick Clissett, a Nato spokesman, confirmed last night that the Gurkhas had been killed clearing munitions, but could not say whether the explosives were booby-trapped. Nato investigators will certainly wish to know what the munitions were doing in a school house.
"This event is a clear example of the difficulties faced by K-For and in particular the danger from unexploded munitions and mines," a Nato source said.