The Alliance stated there was "no evidence" to support Serbian claims that the bus, three civilian vehicles and two police cars were hit by aircraft on a road in between the town of Pec and neighbouring Montenegro on Monday.
The casualties, said Nato officials, could have been caused by an ambush of the convoy by units of the Kosovo Liberation Army, which is operating in the area.
Nato admitted that last Saturday one of its missiles hit a bus on a bridge north of Pristina, which resulted, the Serbs say, in the deaths of 39 people. However, spokesman Jamie Shea said yesterday that Monday's attack was not the work of Nato.
He added that the incident took place in a "very hilly, wooded area along the Albanian-Montenegrin border, which has seen some very intense fighting over the last few days between the Serbs and the [Kosovar] rebels. It's classic ambush country.
"The bus would not seem to have been hit by a missile or a bomb from an aircraft. But small arms fire, mortars and ground skirmish are also possibilites that at least have to be looked at," said Mr Shea.
Allied aircraft carried out one of Nato's most effective nights of attacks since air strikes began, hitting 50 targets inside Kosovo, including tanks and artillery and special police and paramilitary units. In a dogfight - the first since the earliest days of the conflict - a US Air Force F16 shot down a Serbian Mig 29, the most advanced aircraft possessed by Slobodan Milosevic.
Serbian forces in Kosovo are driving civilians into labour camps and using them to build a "Maginot Line" of defence against a future ground attack by allied troops, according to Nato. A hundred thousand men of military age have disappeared and 4,000 of them are said to have been executed. Many others have been imprisoned and were being forced into tasks ranging from building fortifications to digging graves, said the alliance.
Nato also claimed yesterday that Mr Milosevic has succeeded in virtually clearing Kosovo of its ethnic Albanian population, with 90 per cent forced from their homes. A total of 1.5 million Kosovar Albanians are now rootless, with 800,000 expelled to neighbouring countries and others living in the open and seeking shelter inside Kosovo. Prizren, Kosovo's second city, has been emptied of almost all its population of 180,000.
There have been reports of mass executions in 65 towns and villages, with confirmation of mass graves in seven locations. The Serbians have also re-started a large scale policy of deportation. In the latest incident 11,600 refugees were dumped across the border in Macedonia on three trains.