Serbian veto delays a deal

KOSOVO PEACE negotiations moved to a cliff-hanging finale last night as President Slobodan Milosevic refused to permit Nato troops on Yugoslav soil - a veto that in theory could unleash Western air strikes as early as this weekend.

The Yugoslav leader made his stand on Tuesday when he met Christopher Hill, the US diplomat who has been leading efforts to broker a settlement between Belgrade and the ethnic Kosovo Albanians at the talks at Rambouillet near Paris.

But diplomats from the leading powers, who have set a deadline of noon on Saturday for agreement, remained hopeful a deal could be reached. They believed Mr Milosevic would hold out to the last moment before signing.

But his sudden stand was an unwelcome setback to the possible trade- off that had been shaping up. The Albanians, however reluctantly, would drop their demands for a specific promise in the three-year interim agreement of a subsequent referendum, assuring them of ultimate independence.

In return, Yugoslavia would accept Nato peace-keepers. The Russian foreign minister, Igor Ivanov, was in Rambouillet earlier this week, trying to sweeten the pill by promising that Russia, Serbia's main sympathiser in the six-nation Contact Group of major powers, would contribute to the force.

Plans are all but ready for up to 30,000 Nato troops to move into the Serbian province to underpin a deal guaranteeing Kosovo broad autonomy, with its own elected parliament and police force. Once the latter was installed, Yugoslavia would keep only 1,500 troops in the province, to guard its external borders. The Kosovo Liberation Army, which has conducted an 18-month guerrilla war, would be disbanded.