The German chancellor, Mr Gerhard Schroder, visited his country's peacekeeping troops in Kosovo yesterday and said their work was helping to banish the memory of the Nazi occupation of the region during the second World War.
Mr Schroder also met Kosovo Albanian and Serb political leaders and the head of the Serbian orthodox church, Patriarch Pavle, during his visit to the southwestern city of Prizren.
Thousands of people lined the city's streets to welcome him, clapping hands and chanting his name. Some people waved German flags and others shouted "Deutschland!"
Mr Schroder, who was also presented with the keys to the city, said the reception was a tribute to the German army, the Bundes wehr, which has its Kosovo headquarters in Prizren.
Mr Schroder said the German army could not completely erase those recollections of the "historic guilt" for "crimes carried out in the name of Germans" but it could represent a new peaceful Germany which, above all, stood for upholding human rights.
He said he had made clear in all his talks with local political leaders that Serbs should be free to stay in the province. At least 80,000 have fled in the past weeks fearing revenge attacks from ethnic Albanians.
He said Germany would provide one million marks (£403,225) in immediate aid to rebuild destroyed Serb houses.
Mr Schroder held about an hour of talks with Patriarch Pavle and Bishop Artemije, another senior Orthodox figure. He said he had asked the church, already critical of President Slobodan Milosevic, to work for democracy in Yugoslavia.
A German government source said Yugoslavia had complained it had not been notified of Mr Schroder's visit.
Although all of its forces have withdrawn from Kosovo and the province is effectively under the control of NATO and the United Nations, Belgrade has been keen to assert that the province remains a part of Yugoslavia.
The government official told reporters Germany believed the notification of visits was an administrative matter.