War In The Balkans - Diplomacy: Finnish envoy emerges as key peace broker

DIPLOMATIC EFFORTS to solve the Kosovo crisis entered a crucial phase last night, amid possible signals of flexibility from President Slobodan Milosevic, and the growing likelihood of a new Russian- European mission to Belgrade before the end of the week.

The key meeting yesterday was in Helsinki, between the US deputy secretary of state, Strobe Talbott, Russia's special Kosovo envoy, Viktor Chernomyrdin, and the Finnish President, Martti Ahtisaari, who could emerge as a pivotal figure in any diplomatic solution to the crisis.

If all goes well, Mr Chernomyrdin and Mr Ahtisaari could travel to Belgrade before the end of the week, carrying a plan with the imprimatur of the G8 group of leading industrial powers, which could be turned into a security council resolution at the United Nations.

The Helsinki discussions, diplomats said, could continue today - just as senior officials from the G8 countries (Britain, France, the US, Russia, Italy, Germany, Japan and Canada) gather in Bonn to continue drafting a resolution fleshing out the principles for a settlement agreed by their foreign ministers a fortnight ago.

Simultaneously, Italy said that Serbia's Prime Minister, Milan Milutinovic, had indicated that Yugoslavia could accept the outlines of the G8 package, even though it had misgivings on some aspects of it. "We are open to this in spite of some reservations," a Yugoslav Foreign Ministry spokesman in Belgrade had said earlier.

These words were being weighed last night by Nato diplomats, some of whom were sceptical that they amounted to anything more than another effort to split the alliance just as some of its members - most notably Germany - were ever more uneasy about a continuation of the air strikes.

The devil, as ever, is in the details. According to Italian officials, Mr Milutinovic insisted the problem had to be handed over to the UN, in effect placing a solution at the mercy of a Russian or Chinese veto in the Security Council.

Nor was there any sign yesterday that the stumbling blocks that existed even before the Chinese embassy bombing had been removed; notably the composition of the "effective" international security forces to be deployed in a post-war Kosovo, to guarantee the safe return of the refugees.

Nato could accept a military force under the auspices of the UN, but only if its core consisted of heavily armed Nato troops. Big question marks also surround the timing of a bombing halt, and the status of Kosovo once the fighting is over.