International monitors, backed by pressure from NATO and Moscow, were trying yesterday to negotiate the release of eight Yugoslav soldiers held by ethnic Albanian guerrillas.
The Yugoslav army, which moved armoured units into the mountain area where the soldiers are thought to be held by the Kosovo Liberation Army (KLA) and shelled separatist strongholds on Saturday, pulled back yesterday to allow talks to take place.
"I'm optimistic," Mr Heinz Nitsch, a spokesman for an international monitoring mission in the troubled province, told reporters.
Mr Fernando del Mundo, spokesman for the United Nations refugee agency, UNHCR, said a 15-year-old ethnic Albanian was killed in Saturday's shelling of the village of Perane, north of the provincial capital Pristina, and another youth was wounded. Mr del Mundo said some 90 per cent of Perane's 1,000 inhabitants had fled the shelling.
A week of mounting violence in the southern Serbian province, especially the capture of the soldiers last Friday, has triggered international concern over the situation in Kosovo, which has a 90 per cent ethnic Albanian population. The Secretary General of NATO, Mr Javier Solana, appealed to ethnic Albanian separatists to free the soldiers and called on both sides to show restraint.
Mr Solana's spokesperson said: "He appeals to President Slobodan Milosevic to withdraw any additional deployment of men and weapons in northern Kosovo and to stop any aggression against villages in the region."
Russia, a traditional ally of Yugoslavia, also demanded the release of the hostages.
Meanwhile in Bosnia, five monitors of the United Nations policing mission were attacked and injured by an angry crowd which surrounded their office after the shooting of a Bosnian Serb war crimes suspect.
Mr Dragan Gagovic, former police chief in the eastern town of Foca sought by the UN war crimes tribunal on charges of raping and torturing Muslim women during the Bosnia war, was shot dead by UN peacekeepers on Saturday when he tried to run them over as they moved in to arrest him.
Bosnian Serb leaders reacted angrily to the shooting, saying children's lives had been endangered. Bosnian Serb television said there were six children in Mr Gagovic's car, and a 10-year-old girl said her friend had been slightly injured.
The girl, Sanja Bjelovic, said on Saturday Mr Gagovic had tried to drive around what appeared to be a road block. "But suddenly we heard a shot and he wanted to protect us and said: `Keep your heads down!' " she said. Sanja said a tyre blew up and the vehicle turned around after hitting a rock.
A senior Bosnian Muslim official welcomed the operation to get Mr Gagovic, saying he hoped NATO troops would soon go after the two most wanted war crimes suspects, wartime Bosnian Serb leader, Dr Radovan Karadzic, and his military commander, Gen Ratko Mladic.
A UN spokeswoman said two of the monitors - from India and Portugal - were still in hospital following the incident, but their injuries were not life-threatening. All 15 monitors were later evacuated by the NATO-led Stabilisation Force in Bosnia to a nearby base, due to fears for their security.
Mr Gagovic (38) and seven other Bosnian Serbs were charged by the The Hague-based UN tribunal in 1996 with raping and torturing Muslim women in Foca, some as young as 15, in 1992 and 1993.