Those killed in the village of Racak, south of Pristina, were mostly men who had been rounded up and shot at close range. Some had been mutilated.

International monitors say they have also seen the bodies of three women and a 12-year-old boy.

The BBC's Jacky Rowland in Racak: Victims shot

Both US President Bill Clinton and the head of the international observer mission in Kosovo blamed Serbian forces for the killings.

Mr Clinton said it was a clear violation of commitments made to Nato by President Slobodan Milosevic for a peaceful solution in Kosovo.

The US is calling for a meeting of Nato ambassadors in Brussels, possibly as early as Sunday.

Nato Secretary-General Javier Solana said the alliance would not tolerate a return to all-out fighting and repression in the province.

War crimes inquiry

The massacre has prompted the International War Crimes Tribunal on the former Yugoslavia to open an urgent inquiry.

The Tribunal's chief prosecutor, Louise Arbour, is to leave for Kosovo within the next two days to investigate the mass killings.

A spokesman for the UN Tribunal, Christian Chartier, said: "Ms Arbour has launched an investigation into the most recent massacre in Kosovo. She is making arrangements to head a field mission."

Mr Chartier added: "She will demand immediate access to Kosovo, without obstruction, and to the site at Racak," referring to repeated Serb denials of visas for tribunal investigators.

Local villagers say the slaughter of the victims, mostly men aged between 18 and 65, was carried out by Serb forces who rounded the group up on Friday night.

BBC World Affairs correspondent David Loyn: "This was an horrendous event"

Serbia dismissed reports of the massacre as media manipulation and said its forces came under attack while they were investigating the murder of a policeman.

The Kosovar Albanian political leader, Ibrahim Rugova, has declared Sunday a day of mourning in Kosovo.

Killings 'unacceptable'

Germany, which currently holds the presidency of the European Union, said the international community would not accept such acts of persecution and murder.

Jacky Rowland in Pristina: This is a blatant challenge to the authority of ceasefire monitors in Kosovo

In Paris, the French Foreign Ministry expressed disgust at the massacre and called for a meeting of the Organisation for Security and Cooperation in Europe (OSCE) to investigate who was responsible.

UK Foreign Secretary, Robin Cook, said: "Those responsible for the crimes must be held to account before international justice."

The feelings of anger were echoed on the ground in the region.

The US special envoy, Richard Holbrooke, condemned the killings, saying they were the most serious offence since the outbreak of the violence which has plagued the province in recent months.

Mr Holbrooke said the Yugoslav authorities should punish those responsible for the crimes themselves.

The head of the international monitors in Kosovo condemned the massacre as an "unspeakable atrocity" and "a crime very much against humanity".