Serb sources quoted witnesses as saying that at least 17 people had been killed.

Reports said a missile landed on a road near Pec in western Kosovo.

Montenegrin radio reported that five other vehicles - three civilian and two police - had also been hit.

John Simpson in Belgrade: Civilian casualties seem likely to go up

Serb media said at least 10 people on the bus were killed; the remaining casualties were presumed to have come from the other vehicles.

Nato said it had no information on the report.

It follows what Nato said was a tragic accident on Saturday, when one of its missiles hit another bus in Kosovo, killing at least 24 people.

Blackout

Jacky Rowland: "The whole country has been brought to a standstill"

The reports came shortly after Belgrade and other parts of Serbia again lost power after Nato's overnight bombing disrupted the electricity supply.

Nato dropped graphite bombs which exploded over power stations, causing short-circuits without seriously damaging the plants below.

Power was restored in the morning to parts of Belgrade, but was cut again in the afternoon.

Hospitals have reportedly been running on generators, while television stations have been off-air.

Nato spokesman Jamie Shea said: "The fact that the lights went out across 70% of the country shows that Nato has its finger on the light switch in Yugoslavia.

"We can turn the power off whenever we need to and whenever we want to."

BBC Defence Correspondent Jonathan Marcus says the concerted attack by Nato warplanes on Serbia's electricity grid marks a new step in the alliance's air campaign against Yugoslavia.

(Click here to see a map of recent Nato strikes)

Diplomatic moves

News of the bus explosion came as Russian special envoy Viktor Chernomyrdin headed to the US to meet President Bill Clinton in an attempt to end the conflict.

On Monday, President Clinton said he was pleased that three US prisoners-of-war had been released from Belgrade, following the mission of US civil rights campaigner Reverend Jesse Jackson.

President Clinton said that while he was very thankful for the release, Nato military action in Yugoslavia had to continue.

The president was also scheduled to hold talks with Reverend Jackson, who was given a letter for Mr Clinton by Yugoslav President Slobodan Milosevic.

The Yugoslav leader was understood to have requested a face-to-face meeting with President Clinton.

Russian efforts

Mr Chernomyrdin was carrying a personal message for Mr Clinton from Russian President Boris Yeltsin.

He said the letter outlined concrete suggestions for solving the Kosovo conflict.

Mr Chernomyrdin also planned to meet US Vice-President Al Gore and UN Secretary-General Kofi Annan.

He has been shuttling between Moscow, Belgrade and various western European capitals in his mediation attempts.

Soldiers freed

The three US soldiers freed by Mr Jackson were reunited with their families on Monday after flying out of Yugoslavia to Germany.

The soldiers spent more than a month in captivity

The soldiers - Staff Sergeant Christopher Stone, Staff Sergeant Andrew Ramirez, and Specialist Corporal Steven Gonzales - were said by a spokesman at Landstuhl Regional Medical Centre to be "reasonably healthy".

The soldiers' arrival on Sunday at a US Air Force base in Ramstein marked the end of a day-long journey from Belgrade with Reverend Jackson.

President Clinton said he was pleased at the soldiers' release but did not immediately comment on the proposal to meet President Milosevic.

Nato aid

Nato said on Monday that it would start building camps in Albania to accommodate up to 60,000 Kosovo Albanians who have fled to neighbouring Macedonia, which is struggling to cope with the flood of refugees.

Lieutenant-General John Reith, commander of the Nato Albania Force for Humanitarian Assistance (Afor), said his forces were looking for sites in Albania where refugees from the former Yugoslav republic could be housed.

Paul Wood reports from Macedonia: The relief camps are full to bursting

Macedonia, which is sheltering more than 190,000 refugees, has repeatedly warned that its economy is struggling to cope with the flow of displaced people.

UK Prime Minister Tony Blair visited Macedonia on Monday to reassess the refugee situation and shore up support for Nato's campaign against Yugoslavia.

Downing Street said that the UK was ready to give shelter to more refugees. The German Government said on Monday that it was ready to double the number of refugees it was prepared to accept to 20,000.

Other top stories

• Gere in refugee plea
• 'Face Nato bombs' refugees told
• Soldiers back with loved ones
• 'Soft bombs' hit hard
• Blair promises refugee help

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