Tuesday, October 13, 1998 Published at 12:50 GMT 13:50 UK
Agreement in Belgrade
Ready for action: The Nato activation order is still in place
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."
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.
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.
"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."
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:
If military action is to go any further, the allies will have to take a further political decision.