The North Atlantic Treaty Organisation has rejected a Balkans peace proposal put forward by the Russian Prime Minister, Mr Yevgeny Primakov.
NATO's air offensive will therefore escalate, and the military operations are destined to last, in one shape or another, for months.
It is now clear that Kosovo will be independent; the only question is how much of the territory of the province will ultimately be controlled by ethnic Albanians.
The consensus at the alliance's headquarters was that a Russian diplomatic initiative should be encouraged, partly in order to respond to the anti-Western backlash in Moscow, and partly in order to ascertain whether Mr Slobodan Milosevic is now ready to sue for peace.
There were, however, two conditions which NATO attached to this Russian effort:
Firstly, the alliance made clear that it would not call a halt to the air offensive while Mr Primakov was in Belgrade. Secondly, Mr Primakov was privately informed that there was little point in coming back from Belgrade with a Yugoslav offer to talk; Mr Milosevic was expected to accept the Western terms of a peace deal, complete with the introduction of Western peacekeepers into Kosovo.
The fact that the Russian initiative failed came as no surprise. But the episode does offer NATO some interesting insights into Mr Milosevic's current mindset and strategic calculations.
It is now clear that, despite the heavy bombardment by NATO air forces, the Yugoslav leader has no intention of compromising.
He is planning for a long war, not because he believes that his country can win it, but because he assumes that the West would ultimately lose interest.
Under NATO's original war plans, the first phase of the air operation was designed to destroy Yugoslav air defences. The strategy has not worked, mainly because the alliance underestimated Mr Milosevic's war plans.
Instead of putting up stiff opposition, Yugoslav air defences were switched off, preventing Western aircraft from targeting radar systems, and thereby depriving NATO of the certainty that the alliance controls the air space.
Military planners in Brussels were therefore faced with two choices. They could either decide to continue with the first phase of the operation by concentrating on air installations in Serbia, while leaving the ethnic Albanians to the Yugoslav forces, or they could redirect the effort towards Kosovo and take a calculated gamble that they could lose aircraft to the still existing Yugoslav air defences.
The alliance chose the latter course and, in the process, is incurring some severe risks. The destruction of Yugoslav tanks requires low-flying techniques which expose aircraft to fire from the ground, as well as the chance that the Yugoslav military could lure NATO air forces into a trap, switch on many existing radar systems and move in for the kill.
Brussels will not know until early next week whether the Serb troops in Kosovo have been seriously depleted by this offensive. Faced with these developments, NATO ambassadors in Brussels are now planning to raise the stakes. Military commanders have drawn up plans for a "third phase" of the air campaign, which will target the buildings of the ministry of defence and security services in Belgrade, as well as key economic targets.
The risk is that this switch in tactics will start creating civilian casualties in Yugoslavia, precisely what the alliance sought to avoid. But the feeling among Western governments is that this risk may be worth taking, in order to avoid a much bigger danger of pressure from public opinion to introduce ground troops.
NATO has drawn up contingency plans for ground forces. But they entail the creation of a 100,000-strong expeditionary force, something which will take weeks to put together. Furthermore, Europe cannot hope to provide all the troops; the US will have to commit at least half of this contingent, and the consensus in Washington is that the US Congress will never accept this.
NATO is therefore stuck with its policy of air strikes.
Among all the mayhem, however, there is one possible outcome. Mr Milosevic may want to rid himself of all the Kosovo Albanians, but he must know that their total eviction, even if achievable, will force the West into naming him as a war criminal and commit NATO to a persistent campaign against his country.
He may therefore opt for a policy which allows NATO to claim some victory. This will consist of dividing Kosovo, retaining Serb control over the northern part of the province, while leaving the southern part of Kosovo as a vast refugee camp. NATO troops will then march in unopposed in order to protect the Albanians.
This will allow Western governments to claim that they have committed ground troops, but also reassure them that these troops will not suffer many casualties. And once the humanitarian operation begins, it will be difficult to continue with the air strikes; a de facto ceasefire will ensue, and Mr Milosevic will be able to claim that he has achieved at least part of his objectives.
Jonathan Eyal is director of studies at the Royal United Services Institute in London