Meeting in Washington to mark the alliance's 50th anniversary, they said air strikes would continue until Yugoslavia met all their demands over Kosovo.

Overnight, alliance planes attacked the southern Serbian city of Nis. The authorities claimed that 26 missiles hit the city as jets attacked in two waves.

The BBC's Stephen Sackur: "A well drilled display of unity"

The commander of the civil defences said immense damage had been done. A factory and a railway shunting yard were reportedly hit, as were the waterworks and electricity power lines. Local sources said one civilian had been injured.

In the northern town of Novi Sad, the oil refinery was said to have been targeted again and the flames from Yugoslavia's burning oil supplies lit up the night sky.

Areas around the capital of Kosovo, Pristina, were reported to have come under heavy bombardment, with air attacks on Slatina airport and on the communications tower high on Goles mountain.

Oil embargo

Following Nato's inclusion of an oil embargo in its 17-point statement on Kosovo, the alliance is drawing up plans to search ships in the Adriatic to prevent oil and other vital supplies reaching Yugoslavia.

The Supreme Allied Commander, General Wesley Clark, is working out rules of engagement for approval by Nato members after differences emerged over whether to apply a naval blockade.

The BBC's Mark Laity: "The stakes are too high"

The US said the alliance should apply a stop-and-search operation, but the French President, Jacques Chirac, said that stopping ships at sea would violate international law.

Analysts said such an operation could also provoke a confrontation with Russia if Russian ships were boarded and resisted a search.

UN resolution

Nato said it would suspend action against Yugoslavia once Belgrade had "unequivocally accepted" its conditions.

Officials said Serb forces would have to withdraw to a "precise and rapid timetable"; Albanian refugees would also have to be allowed to return to Kosovo under the protection of an international force.

Nato said it would seek a UN resolution to back its demands.

Bombing criticism

However, alliance attempts to show a united front suffered from Italian and Greek criticism of the bombing.

Speaking during the Nato summit, Greek Prime Minister, Costas Simitis, said the air strikes had done nothing to end the expulsion of Kosovo Albanians and called for diplomatic efforts to find a solution.

The Italian Foreign Minister, Lamberto Dini, said he disapproved of the attack on Thursday night of the headquarters of Serbian Television, in which the Serbs said at least 10 people had died.

The BBC's John Simpson: "It was the home of Milosevic's most powerful propaganda weapon"

Nato was earlier rebuked by several Western media organisations for the raid.

However other alliance leaders defended the attack, saying Yugoslavia's state-run media played an essential part in promoting Yugoslav President Slobodan Milosevic's malign doctrine of ethnic superiority. They said such attacks were likely to continue.

(Click here for a map showing latest strikes)

More tanks

The US signalled its determination to continue the campaign by announcing it was sending 2,000 extra troops, 15 additional tanks and more artillery to Albania.

US Defence Secretary William Cohen ordered the deployment to protect the 24 American Apache "tank-buster" attack helicopters, which are currently engaged in exercises in Albania.

The move brought to 5,000 the number of US soldiers sent to the area.

Montenegrin war of words

Meanwhile on the ground, the government of Montenegro has criticised attempts by the federal Yugoslav authorities to prevent foreign aid from entering the republic.

It said the federal authorities had threatened to confiscate any unauthorised imports entering the Adriatic port of Bar.

Correspondents said it was the latest sign of the worsening tensions between Montenegrins and Serbs - who make up the Yugoslav federation.

• Serbian media rises from the ashes
• 'Two in three support strikes'
• Montenegro debate hots up
• Aid reaches stranded refugees
• Clubbing for Kosovo
• Russia proposes peace deal