A senior United States mediator trying to negotiate a peace agreement in Kosovo says progress is being made, and despite big problems, a political settlement is now just weeks away.

The mediator, Christopher Hill, who is American ambassador to Macedonia, told the BBC that a three-year deal was being negotiated on restoring local government for Kosovo, including holding local elections and establishing a separate ethnic-Albanian police force.

Mr Hill said the separate state demanded by some Kosovar Albanians could be decided only between the parties involved once the three-year agreement expires.

He said the problem of refugees being stranded in the open had now diminished substantially, and Serbian withdrawals had continued despite reports of sporadic fighting.