James Robbins on the deal struck by Holbrooke

US Balkans envoy Richard Holbrooke confirmed that Belgrade is willing to allow the verification mission by the Organisation for Security and Co-operation in Europe.

The force will be supported by non-combat aircraft carrrying out aerial surveillance over the Serbian province.

Mr Holbrooke said the OSCE mission will have freedom of movement and has been given guarantees of security by Belgrade.

He said that Nato Secretary-General Javier Solana is expected to fly to Yugoslavia in the next few days.

He said: "I hope this will mark a turning point in the tragic relationship between the peoples of Kosovo."

Richard Holbrooke at his press conference today

Mr Holbrooke said he hoped the deal would lead the way to "autonomy and self-determination" for the people of Kosovo, 90% of whom are ethnic Albanians.

But he also warned: "We're not out of the emergency yet. We're still in it."

President Milosevic told the nation in a television address that the accord removed the threat of military intervention. But his office put out a statement saying that the agreement with Mr Holbrooke guarantees Kosovo's autonomy within Serbia - less than has been demanded by Albanian leaders.

Representatives from the Albanian separatist group, the KLA, said anything short of full independence was unacceptable.

'Commitments not compliance'

US President Bill Clinton had earlier welcomed developments on the road to agreement.

He said the Yugoslav leader's commitments on international observers, the withdrawal of Serbian troops and a timetable for Kosovo autonomy could provide a diplomatic solution to the crisis.

Bill Clinton: "Graveyards full of Milosevic's broken promises"

But he warned: "Commitments are not compliance. Balkan graveyards are filled with President Milosevic's broken promises."

UK Prime Minister Tony Blair called Monday's developments a "breakthrough" but warned Nato was still "prepared to use force if necessary".

A Russian Foreign Ministry spokesman welcomed the deal and said his country would probably take part in the observer mission.

Nato ambassadors issued an activation order authorising air strikes late on Monday after being briefed by US Balkans envoy Richard Holbrooke.

Richard Holbrooke: Announced agreement

But it included a four-day delay to allow further talks in Belgrade after the progress made on Monday. Correspondents say Nato's decision to hold fire for 96 hours - twice as long as was earlier suggested - recognised the gains Mr Holbrooke had made and the possibility of a peaceful settlement.

Javier Solana: "Diplomacy can succeed"

Announcing the decision to authorise military force, Nato Secretary General Javier Solana said: "Yugoslavia has still not complied with UN resolution 1199 in a way that can be verified."

"Even at this last hour, I believe that diplomacy can succeed and the use of military force can be avoided. but the responsibility lies on the shoulders of President Milosevic. He knows what he has to do."

Despite the agreement in Belgrade, Nato officials say the activation order remains in place.

Autonomy deal scorned

Isa Zymberi, a spokesman for the Kosovo Information Centre in London, said: "What is on the table now is some sort of autonomy that is less than what they enjoyed during the Communist era of Yugoslavia, and as such it looks quite unacceptable.

"If it is imposed, I think that Milosevic will find ways of manipulating the international community again."

Reactions from Pristina

The Operational Director of Medecins sans Frontieres, Vincent Janssens, said that any deal must give "concrete physical protection" to refugees.

But the Yugoslav ambassador to the UN, Vladislav Jovanovic, said Nato had disregarded the authority of the UN Security Council.

"[Nato] has decided to act against a country which defends itself against terrorism and a separatist attempt to wrench an integral part of our territory out of Serbia and Yugoslavia," he said.

Countdown to action

The activation order is in effect a countdown to possible military action in four days' time. It:

• Brings the forces of the Nato allies under the command of Nato supreme commander General Wesley Clark.
• Deploys Nato warplanes to Italy.
• Allows for a limited programme of missile strikes.