But shortly after the two men spent almost four hours in talks, a statement was issued by Belgrade television in which Mr Milosevic appeared to reject the Kosovo peace proposals; the Yugoslav leader called for "genuine political negotiations".
The talks broke up shortly before midnight to allow Mr Holbrooke to brief Washington but seemed likely to reconvene again later in the night; the US delegation were set to remain overnight in Belgrade. Sources close to the talks said that Mr Holbrooke "made very clear to President Milosevic that this was a grave situation and that he must live up to his obligations and agree to a political settlement".
If the state of the Milosevic-Holbrooke talks was unclear last night, so was the precise meaning of Mr Milosevic's statement, as relayed by Belgrade television, and whether he was referring to the talks with Mr Holbrooke, or the talks that ended in Paris last week. At the Paris talks, Kosovan representatives accepted the terms for a settlement, but the Yugoslav delegation refused.
The Belgrade television report suggested that Mr Milosevic had countered the Nato threat with one of his own. "Sticking to the decision to end the negotiations even before they began would mean forgoing a peaceful political solution," it said, quoting Mr Milosevic. But he also made it clear that the terms set out in Paris were still unacceptable to Belgrade. "Anyone who is out to impose solutions by force will have to face the responsibility for actions aimed against a policy of peace, and the consequences that would ensue."
Throughout the weekend and continuing yesterday, Serbian forces showed their contempt for the West's overtures by torching Kosovo villages, murdering civilians and driving thousands more from their homes.
At a stopover in Brussels yesterday morning, Mr Holbrooke said that he had been entrusted to give a final warning that the West was "on the brink of military action" over Kosovo. General Wesley Clark, Nato's Supreme Commander, threatened to "strike in a swift and severe fashion" if Mr Holbrooke returned from Belgrade empty-handed.
Tony Blair also said he and the French President, Jacques Chirac, had agreed that Nato would have no choice but to bomb Serb targets unless Belgrade backed down. "They agreed the situation is now grave," a spokesman said. "If Milosevic does not stop his offensive immediately and sign up to the Rambouillet accord, Nato has no option but to act."
In Washington, President Bill Clinton was more cautious, insisting the US still sought "a peaceful solution". The US President would only say: "If Milosevic continues to choose aggression over peace, Nato plans must move forward."
A meeting of Nato ambassadors in Brussels gave the Secretary-General, Javier Solana, the right to authorise attacks not only on Serb air defences but to strike at targets throughout the country.
In Moscow, the Serbs' close ally, the Russian Prime Minister, Yevgeny Primakov, warned that Moscow remained "categorically against the use of force". Nato diplomats believe Mr Primakov may cancel his planned visit to Washington today owing to fears that air strikes might be launched during his US stay.
Nato has about 400 aircraft ready to launch strikes, including B-52 bombers and F-117 radar-evading Stealth fighters as well as US submarines and surface ships capable of firing cruise missiles.
In Belgrade, state television had said earlier that Mr Milosevic had sent a fierce letter to the French and British foreign ministers saying that Serbia would not accept an imposed solution. He said Robin Cook and Hubert Vedrine should be ashamed of themselves for threatening a small European nation with bombing.
The situation in Kosovo is deteriorating fast. Nato sources believe about 22 per cent of the two million population have been driven from their homes.
In the town of Srbica yesterday, terrified Albanians fled homes set on fire by the Serbs and told of mass killings of civilians by Serb security forces. "They came to our house wearing green uniforms and black masks," said Adile Mustafa. "They rounded up about ten men and took them up the hill, and we heard shooting." By nightfall, hundreds of local people were streaming out of the town towards Mitrovica, in the north of Kosovo.
The Western alliance argues that, far from scaling down their activities, Serb forces are still on the offensive, pushing south through the Drenica heartland of the rebel Kosovo Liberation Army. It bodes ill for the thousands of Albanians still living in the rolling hills of southern Drenica. Unless Nato strikes, they will be next.
Europe's Vietnam? page 11
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