PRISTINA, Serbia (Reuters) - A new,

U.S.-drafted peace plan for the restive

Serbian province of Kosovo proposes

linking it more closely to federal Yugoslavia

and diminishing its ties to Serbia, according

to excerpts published Wednesday and from

a copy seen by Reuters.

The latest draft of the plan, distributed to the

warring sides by U.S. envoy Christopher

Hill, was seen as a step forward by ethnic

Albanians, who are fighting for

independence for the southern Serbian

province but have reluctantly accepted Hill's

efforts to find a peaceful solution.

The November 1 draft, excerpts of which

were published in Albanian by the leading

ethnic Albanian newspaper Koha Ditore,

proposes that the province would have

deputies only to the federal assembly and

not the Serbian assembly as was the case

in the previous draft dated October 1.

``Kosovo shall be offered at least (30)

deputies in the House of Citizens of the

Federal assembly,'' an excerpt of a draft

copy seen by Reuters said.

The previous version said Kosovo would

have 10 deputies in the federal house and

20 in the Serbian national assembly.

The draft also proposes that Kosovo have

at least one place in the federal government

and a judge in the federal court, but in a

change from the previous draft it drops

references to Kosovo holding equivalent

seats in Serbian institutions.

A senior ethnic Albanian politician said the

latest draft and its provision for

representation in the federal instead of the

Serbian republic level was a step forward,

although the ethnic Albanians still have

many reservations.

``In the new draft there are elements which

are an advance compared to the last draft

and they bring us closer to being a republic

equal to the others,'' the source said.

``But we still have remarks to make on this

draft,'' he said.

The new draft plan, according to the Koha

Ditore excerpts, says that the federal

republic would have responsibility for issues

of territorial integrity, defense, foreign and

monetary policy and economic policy.

Koha Ditore did not publish the entire text of

the draft, which runs 30 pages in English

and also has several annexes, but its

editors said more excerpts would appear

Thursday.

The publication came the same day that

Serbian President Milan Milutinovic was due

in Kosovo's provincial capital for peace talks

which Serbia announced at the weekend as

an alternative to the efforts spearheaded by

Hill.

Ethnic Albanians have already indicated

they intend to stay away from the talks,

which they have dismissed as a

propaganda ploy.

Kosovo has been wracked by almost nine

months of violence sparked by an

independence uprising by ethnic Albanian

separatists who were brutally crushed by

Serbian security forces.

Reut05:21 11-18-98