BBC's Jeremy Cooke: "Things could still go badly wrong"

The American and EU envoys said such action could destabilise the region and hamper the return of refugees to their homes.

Correspondents say the KLA was moving swiftly back into areas from which it was driven by the Serb government's summer offensive.

The EU envoy and Austrian ambassador to Belgrade, Wolfgang Petrisch, said the KLA had "moved in to some of the positions" but he noted there were no fights going on because the Serb security forces were "for once acting in a responsible way".

Wolfgang Petrisch: The KLA must be careful

Speaking in the provincial capital, Pristina, Mr Petrisch appealed to the Albanians "to do the same otherwise new problems will be built up and that would definitely not help the international mission here in Kosovo."

The US envoy in Kosovo, Chris Hill, said he was very pleased that the ethnic Albanian refugees were returning to their villages, and he hoped the process would accelerate.

Chris Hill: "It is our strong view that the KLA should not try to take advantage"

But he warned the KLA not to threaten the stability and peace achieved.

"It is our strong view that the KLA should not try to take advantage of the reconfiguration, the withdrawal of Serbian forces," he said.

Refugees return home

About 300,000 ethnic Albanians were displaced

The warning came amid reports of more ethnic Albanian civilians returning to their villages.

A senior US official said a humanitarian crisis in Kosovo has been averted.

Hugh Parmer, assistant administrator for the US Agency for International Development said: "I don't think we will see any deaths [now]."

Serbs fear reprisals

Serb civilians fear ethnic Albanian majority

As the ethnic Albanian refugees make their way back home, correspondents say that Serb civilians are bracing for what they fear will be widespread reprisals.

They say the Kosovo Albanians will exploit the situation to the full.

"Nato helped them, but they haven't seen anything yet... When the Albanians start taking revenge, the world will have a lot of problems to protect us," said a Serb student.

Randjel Nojkic, Kosovo leader of the opposition Serbian Renewal Movement said the Serbs were now in a very difficult position and "they will have to, whether they like it or not, ask the international community for protection."

Verification mission prepared

With nearly all Yugoslav forces out of Kosovo or back in their barracks, the West is now rushing to send up to 2,000 unarmed personnel to Kosovo to verify that the Yugoslav President, Slobodan Milosevic, complies with the peace agreement.

Richard Holbrooke: "We will fly when and where we wish"

The operation is the responsibility of the Vienna-based Organisation for Security and Co-operation in Europe (OSCE).

The US envoy to Kosovo, Richard Holbrooke, who brokered the agreement with Belgrade, said the OSCE people are not just monitors or observers.