Click here for live coverage on the crisis

Click here for map showing refugee movements

Yugoslav President Slobodan Milosevic has made a conditional offer of a settlement over Kosovo - and warned that the Serbs cannot be broken by force.

In a statement quoted by Yugoslav state television, Mr Milosevic said he is ready to withdraw some forces from Kosovo if Nato halts air strikes on Yugoslavia.

Brian Hanrahan: "Outrage at refugee misery may harden Nato attitudes"

However as the humanitarian crisis deepens, threatening to destabilise the Balkans, Western leaders have rejected the proposal brokered by Russian Prime Minister Yevgeny Primakov as "unacceptable".

The United States said Mr Milosevic's pledges fall far short of what is needed to end Nato strikes.

German Chancellor Gerhard Schröder told a news conference after meeting Mr Primakov in Bonn: "The proposals are no basis for a political settlement." Meanwhile, more Nato missiles are reported to have hit targets in Kosovo on the seventh night of Nato attacks as bad weather once again is reported to have disrupted the bombing missions.

The Yugoslav news agency, Tanjug, said a series of explosions were heard southeast of the capital, Pristina. It gave no details of damage.

Mr Milosevic's statement came after six hours of emergency talks with Mr Primakov in Belgrade. Russia, a traditional ally of the Serbs, has been one of the strongest critics of the air strikes, accusing Nato of genocide.

John Simpson: "Nato are determined to push Milosevic further"

Mr Primakov said Mr Milosevic was ready to be constructive: "If the bombing stops he is ready to reduce his military presence in the region.

But a spokesman for UK Prime Minister Tony Blair said: "We have always made it clear that it is actions, not words, that count".

Refugee children await their fate

Since the strikes began seven days ago, Nato has warned that the bombing will only stop if President Milosevic complies fully with the West's demands.

President Clinton has for the first time said the slaughter of ethnic Albanians in Kosovo could undermine international support for Serb territorial claims to the province.

Urging allies to"remain "steady and determined", he said: "If there was ever any doubt what is at stake in Kosovo, Mr Milosevic is certainly erasing it by his actions".

'Genocide' warnings

Ben Brown with the refugees: "It looks as if the whole of Kosovo is emptying"

The diplomatic moves came as Nato said Serb ethnic cleansing had reached ''new heights'' and that it planned to intensify operations against Yugoslav forces.

Tens of thousands of refugees have poured out of Kosovo, leaving aid agencies struggling against the deepening crisis.

UN Secretary-General Kofi Annan has urged the world to help with the crisis asking Albania, Macedonia and Montenegro to keep their borders open.

"I appeal to all of Kosovo's neighbours to give shelter and comfort to the helpless civilians who have been driven from their homes."

"Borders must be kept open, safety and protection must be given to those in need," he said.

US State Department spokesman James Rubin warned there were indications that genocide was taking place.

Roads are reported to be clogged with fleeing civilians, many of whom have been forced from their homes at gunpoint.

In the last three days more than 80,000 refugees have reached Kukes on the Kosovo-Albanian border, recounting stories of of Serb atrocities.

A transport plane supplied by the British government has been shuttling supplies from Copenhagen, Denmark, to the Albanian capital of Tirana.

European Union humanitarian affairs chief Emma Bonino is to travel to the region on Wednesday to assess the situation.

Executions

In Kosovo there are reports of summary executions, round-ups and massive expulsions.

The UN refugee agency, UNHCR, say they fear ethnic cleansing could ultimately lead to a quarter of the population being driven out.

Bill Clinton: We must remain determined with the will to see this through

Nato is trying to confirm reports that Serbs are attacking refugees with artillery and tanks in the Pagarusa valley in central Kosovo.

Pec, a city of 100,000 residents in western Kosovo, is almost totally destroyed, says Nato spokesman Jamie Shea.

There are also reports that several leading Kosovo Albanians have been executed - including Fehmi Agani, the main adviser of the Kosovo Albanian leader, Ibrahim Rugova.

The BBC Rome Correspondent David Willey says the Pope is extremely concerned about the effects of continued Nato bombing, and believes his views are shared by public opinion in many Nato countries.