General Wesley Clark, Nato's supreme commander, and General Klaus Naumann, chairman of the alliance's military committee, were due to hold a second round of talks in Belgrade last night with the Yugoslav President before reporting back to Nato ambassadors in Brussels - at which point a decision on the use of force could be taken.
In Washington, senior officials warned that the "activation order" which brought the alliance to the brink of air strikes three months ago was still in force and that Nato attacks could start "within days". Robin Cook, the Foreign Secretary, told the Commons that the British component of the force could be ready within 96 hours.
He told MPs: "Nato remains fully engaged, fully prepared and fully ready to take what action is judged necessary."
But there would be "grave reservations" about committing ground troops without agreement on a political solution to the conflict, warned Mr Cook.
He said: "To put in ground troops without a commitment on both sides to a political process would be to put in ground troops without a clear political objective."
The Yugoslav government announced that William Walker, the American head of the international monitoring mission in Kosovo, could stay in the country an extra 24 hours, after being ordered to leave by today. Otherwise there was no hint of breakthrough in the Belgrade talks, while Serb security forces and ethnic Albanians allowed no let-up in their conflict.
Yugoslav army artillery continued to pound the hillsides around Racak, scene of the slaughter of 45 Albanians last weekend. One Serb policeman was killed and two were wounded in separate clashes with the Kosovo Liberation Army.
Many diplomats expect President Milosevic to continue his brinkmanship, confident that Nato has little stomach for the use of force. Only if aerial attacks seemed all but certain - as in October - will he pull back his army units as the ceasefire stipulates.
The diplomatic fault lines too among the major powers have not greatly changed in three months.
Russia remains opposed to air strikes, while it supports access for United Nations war crimes prosecutors. Moscow, traditionally a friend of Serbia, argues air strikes would solve nothing and only make a dangerous situation worse.
Despite mounting demands in Britain and elsewhere in Europe, there is little likelihood Nato ground troops will be sent in to impose a peace. Liberal Democrat leader Paddy Ashdown, a former soldier who has taken a close interest in Kosovo, has written to the Prime Minister, Tony Blair, saying he may have to consider sending Nato troops in.
Mr Ashdown said simply withdrawing the peace monitors would see bloodshed escalate and a spread of the conflict beyond Kosovo, so although it would be "extremely difficult", the option of sending in troops had to be considered.
But German defence minister Rudolf Scharping said he was not ready to scrap diplomacy while Italian Premier Massimo D'Alema indicated Nato would be allowed to use Italian bases if it decided to launch an airstrike.
Pleurat Sejdiu, a Kosovo Liberation Army (KLA) spokes-man in London, said the international community must ensure all agreements were implemented, and secure access to Kosovo for the International War Crimes Tribunal.
A new Balkan war could flare up in a matter of weeks if those steps were not taken, he warned.
But Marco Gasic, of the Serbian Information Service in London, said the killings at Racak were in fact an operation against "a reign of terror by the KLA" and a "terrorist encampment" involving non-uniformed as well as uniformed "KLA terrorists".
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