Kosovo homes have been badly damaged by the fighting

The President of Serbia, Milan Milutinovic, has

offered to hold internationally-monitored talks with

ethnic Albanians, on political settlement for

Kosovo.

A statement said Mr Milutinovic

would chair the discussions

himself in the provincial capital

Pristina and that he had invited

representatives from the United

States, Russia, China and

Austria - the current holder of the European Union

presidency.

"All conditions are in place for a direct meeting and

for a discussion to find a political solution for

Kosovo problems," Mr Milutinovic was quoted as

saying by Yugoslav media.

Ethnic Albanian leaders, who have rejected

several such invitations in the past, had no

immediate response.

Belgrade has withdrawn large

numbers of security forces from

Kosovo and agreed to

international monitors entering the

province.

But correspondents say the latest

Serbian proposal makes clear

that Belgrade wants greater

control of what has up to now been an

American-led peace process for Kosovo.

Observers' car under fire

Western officials have raised new concerns about

the safety of peace monitors in Kosovo after a

Yugoslav army vehicle fired a machine-gun burst

over a car containing US diplomatic observers on

Sunday.

The Organization for Security and Co-operation in

Europe (OSCE) leading for the international

verification mission says the observers' car was

clearly marked.

There were no injuries,

but the incident prompted

OSCE to demand an

explanation from Serb and

Yugoslav authorities.

"This type of behaviour

and activity is totally

unacceptable," said

OSCE spokesman

Duncan Bullivant.

"Random firing is not in

the spirit of the ceasefire

agreement."

The shooting incident highlights concerns raised

by international officials earlier that the ground

verification force, of as many as 2,000 unarmed

monitors, is vulnerable to Kosovo unrest despite

Yugoslav President Slobodan Milosevic's

assurances.

Nato plans to station a rapid reaction force in the

neighbouring former Yugoslav republic of

Macedonia as back-up security for the monitors.

US envoy William Walker, who arrived in Kosovo

last week to head the verification mission, is due to

voice the concerns when he meets Mr Milosevic

on Monday. BBC