Correspondents say that this is the worst single act of violence in the province since the killings in the southern village of Racak some 10 days ago.

The five were travelling in their tractor when unidentified people opened fire on them with automatic weapons in the village of Rakovina, south-west of the regional capital, Pristina.

"They were shot by heavy weapons. The bodies look very bad," said Les House, an international monitor with the Kosovo Verification Mission (KVM).

BBC Special correspondent Ben Brown reports (WARNING: some users may find some scenes disturbing)

A man and a woman lay sprawled in the cab of the tractor and two children, believed to be boys aged 10 and 12, and a man lay dead on a pile of corn stalks in the wagon behind the tractor.

KVM officials said they believed the group were killed on Sunday evening at around 1930GMT. The bodies were discovered by a regular KVM patrol along the main route between Djakovica and Klina on Monday morning.

Jacky Rowland reports: "The worst single incident since the killings at Racak"

The monitors notified Serbian authorities who dispatched special police to secure the site, along with an investigative judge. An investigation to establish the identity of the dead and the circumstances of the killings is under way.

US envoy Christopher Hill was negotiating with ethnic Albanians

The ethnic Albanian Kosovo Information Centre quoted a local eyewitness as saying an armoured personnel carrier of the Yugoslav security forces opened fire on the tractor. Ethnic Albanian sources said all the dead came from Rakovina.

However, the Serbian-controlled Pristina Media Centre said the attack happened in an area where there have been no recent police patrols and which is controlled by the Kosovo Liberation Army (KLA).

The international monitors declined to comment except to say that they were satisfied with the government investigation, which they described as "very professional".

The bodies were due to be transported to Pristina late on Monday for autopsy.

The killings were discovered as American envoy Christopher Hill was in the province meeting leaders of various ethnic Albanian factions. Mr Hill has been urging them to agree on a unified team for negotiations with Belgrade on the future of Kosovo.

Western peace efforts

Western powers were on Monday pushing ahead with efforts to organise peace talks on Kosovo.

Barnaby Mason reports: Western powers are considering how to harness threat of Nato air strikes

European Union foreign ministers have drawn back from imposing new sanctions on Yugoslavia, deciding instead to apply equal pressure on Belgrade and the separatist KLA rebels to agree to peace talks.

At the end of the meeting in Brussels, Germany's Foreign Minister Joschka Fischer said: "What we have to achieve first is that people on the ground abandon violence. What we suggest, and think is necessary above all, is a relinquishing of military force."

UK Foreign Secretary Robin Cook added: "The priority is to get both sides in the same room negotiating."

Nato's military options

Across town, members of Nato were discussing military options for the use of force against Yugoslav President Slobodan Milosevic as well as the against the KLA.

Ambassadors from the Atlantic alliance were working on a two-level plan of threatening airstrikes while looking for a diplomatic solution.