Speaking in Bonn after talks with German Chancellor Helmut Kohl, Mr Yeltsin said such military intervention - which is under consideration by member states of the Nato alliance - would destabilise the Balkans with unpredictable consequences for the whole of Europe.

But the Russian president also promised to use his influence with a traditional ally, Yugoslav President Slobodan Milosevic, to help achieve a diplomatic solution.

"I share the concerns of the German people over the situation in Kosovo," Mr Yeltsin told a joint news conference.

"We will meet [with Mr Milosevic] and clarify how we can get out of the situation."

On Monday, the European Union and the United States tightened economic sanctions against Serbia because of its military campaign against ethnic Albanians in Kosovo.

Several thousand Kosovo Albanians have fled across the border to Albania to escape the offensive, which began in earnest at the end of May.

Nato is considering its military options if the violence threatens to spill over into neighbouring countries.

Russia, because of its permanent seat on the United Nations Security Council, could veto any UN resolution allowing the use of force against Yugoslavia.

'Tax for defence'

Meanwhile, there are reports that the self-styled "Kosovo government in exile" , based in Germany, announced it would collect an extra "tax" from an estimated 400,000 Kosovo Albanians living in the West.

Previously the organisation has collected contributions, based on the exiles' earnings, to finance health, educationial and other social programmes in Kosovo.

But the increased "tax" reported on Tuesday was for the "defence of our people" from attacks by Serbian forces, the group, without elaborating further.