Kosovo leader in US talks

PRISTINA (Reuters) - The United States envoy Richard Holbrooke yesterday met Ibrahim Rugova, leader of Kosovo's ethnic Albanian majority, after the Yugoslav President Slobodan Milosevic refused to accept foreign mediation over Kosovo's demand for independence.

Mr Holbrooke spent several hours with Mr Milosevic on Saturday without moving the Yugoslav leader over his rejection of mediation, despite Western sanctions which threaten to inflict fresh damage on his crippled economy.

Mr Rugova has refused direct talks with the Belgrade government without the participation of a foreign mediator and has boycotted negotiations on Mr Milosevic's offer of autonomy within Serbia.

The new sanctions ban foreign investment in Yugoslavia and follow a freeze on its foreign assets imposed last month.