The decision comes after the US civil rights leader, Reverend Jesse Jackson, made an appeal to Mr Milosevic during a three-hour meeting in Belgrade on Saturday.

The three men will be freed on Sunday morning, according to Rev Jackson, who travelled to Yugoslavia with a delegation of religious leaders to seek their release.

"The president took the decision in support of Jesse Jackson's peace efforts," the Yugoslav news agency Tanjug said.

"We do not see [the soldiers] as enemies but victims of war and miltarism."

The move comes in spite of an earlier statement by Yugoslav Assistant Foreign Minister Nebojsa Vujovic, who said the release would not be "on the agenda" for the meeting.

The three soldiers

• Staff Sergeant Christopher Stone
• Staff Sergeant Andrew Ramirez
• Specialist Corporal Steven Gonzalez

Rev Jackson said he had made a "moral appeal" to the Yugoslav leader during their meeting.

During the meeting, President Milosevic urged the religious leaders to jointly exert moral pressure "in order that the rule of law prevail over the rule of force in the world", Serbian Radio said.

Prayers with prisoners

Reverend Jackson was shown the destruction of civilian buildings in Belgrade

Mr Jackson visited the three prisoners on Friday, and prayed with them.

White House officials tried to dissuade Rev Jackson from travelling to Yugoslavia. But when he insisted on making the trip, they urged him to tell Mr Milosevic that there could be no link between the release of the soldiers and an end to Nato air strikes.

The 57-year-old founder and leader of the Rainbow/Push Coalition, who ran for the US presidency in 1984 and 1988, has previously secured the release of captives held in Syria, Cuba, Kuwait and Iraq.

• In 1984, he secured the release of a captured US Navy officer, Lieutenant Robert Goodman, from Syria.
• Three years later, he travelled to Cuba and won freedom for 48 Cuban and Cuban-American prisoners.

• In 1990, he was the first American to bring hostages out of Kuwait and Iraq.