Negotiations had been going on for the release of the soldiers, amid fears that the escalating violence would destroy the shaky cease-fire reached in October.

"The international monitors did not manage to negotiate their release. All deadlines have expired," a Serb source quoted an army officer as saying.

Paul Royall: The leader of this mission has blamed Serbia for most of the ceasefire violations

The Serb Media Center in Pristina, which is close to Serbian authorities, said the operation began around 1000 (0900 GMT) on Saturday.

Two columns of Yugoslav army vehicles were seen leaving their Pristina garrison late on Friday, headed north toward Kosovska Mitrovica, about 40 kilometres (25 miles) northwest of Pristina, where the soldiers are being held.

The eight were taken captive on Friday when rebels attacked a Yugoslav convoy carrying rations to troops stationed in the field.

According to the Serb Media Center, the soldiers were unharmed on Friday.

Policemen killed

Serb authorities reacted to the incident by deploying tanks throughout the provincial capital and threatening strong measures to combat ethnic Albanian "terrorism" in Kosovo.

Jurgen Grunnet: Yugoslavian troops are moving from Pristina towards Mitrovica

Earlier on Friday, three Serbian policemen were killed and three civilians wounded in a shooting incident in southern Kosovo.

The three civilians were in a taxi which is thought to have been caught in crossfire.

The KLA is fighting for the independence of Kosovo, a province of Serbia, where the vast majority are ethnic Albanians.