The move comes days after Yugoslavia released three US prisoners of war in response to an appeal by the Rev Jesse Jackson.

Mr Cohen, who is accompanying US President Bill Clinton on a visit to Europe, denied suggestions that the release of the Serb POWs should be considered a goodwill gesture toward Yugoslav President Slobodan Milosevic for releasing the US servicemen.

"I don't believe Mr Milosevic has made any goodwill overture to us ... no amount of gestures on his part can mask the stench," he said.

Duncan Kennedy: Clinton's job is part political, part military

He told the news conference at a US base in Germany that he expected to make his recommendation "in a relatively short time ... a few days".

The prisoners of war were seized by the Kosovo Liberation Army (KLA) and handed over to the US military.

Mr Clinton's visit to Europe began as Nato suffered its first fatalities since the start of the bombing. Two US Apache crew died when their helicopter crashed during a training exercise in Albania.

Serbian forces have stepped up their persecution of Kosovo Albanians, according to the accounts of refugees leaving the province.

'We are winning'

President Clinton, US Secretary of State Madeleine Albright, and Defence Secretary William Cohen met Secretary-General Javier Solana and other Nato officials on Wednesday morning.

Nato spokesman Jamie Shea said General Wesley Clark had told President Clinton: "We are winning."

The general had said the Yugoslav leadership and its military security force and support structure were "vulnerable to collapse", according to Dr Shea.

Before leaving Washington, Mr Clinton reaffirmed the US commitment to Nato's position - a statement apparently intended to dampen speculation that his own views were weakening.

After his talks with Mr Solana, Mr Clinton briefly met Belgian Prime Minister Jean-Luc Dehaene.

He has now arrived in Germany, where he is speaking to US servicemen.

He will also meet Chancellor Gerhard Schröder - a meeting expected to boost the chancellor's position as his government faces growing public opposition to the war.

Two US airmen dead

Two US airmen are now confirmed dead after an Apache helicopter crashed during a training mission north-east of the Albanian capital, Tirana.

Military officials say the crash will not hinder training operations involving the Apaches.

It was the second Apache to crash in the past 10 days.

They are believed to be the first Nato military casualties in the conflict.

Yugoslav media say Nato aircraft have carried out new attacks in central Serbia, with explosions at Novi Pazar, Kadinjaca and Bajina Basta.

Electricity supplies were cut off in Belgrade.

(Click here to see a map of last night's Nato strikes)

More accounts of abuse

One man shot by Serb police watched two companions die

Increasing numbers of refugees are arriving in Albania and Macedonia, bringing more and more stories of men being taken away and murdered.

Thousands crossed into Albania on Tuesday and more are on their way.

Nato says those fleeing to the province's borders have been "ethnically cleansed" from their homes.

The evidence of physical violence is increasingly a cause for concern.

Many refugees report Serb police demanding money from them. Those who refuse to pay are shot, according to the refugees.

Moving away from danger

The UN refugee agency is considering closing refugee camps in northern Albania and moving people further south, as it fears the refugees may be in danger from Yugoslav artillery fire from across the border.

Fergal Keane in Albania: One of the most terrible days yet

But at the same time, the Albanians may also have to cope with a further influx of Kosovo refugees who have overwhelmed the authorities in Macedonia.

Aid agencies in Macedonia trying to cope with a new influx of Kosovo refugees say they are having to take new measures to deal with security and overcrowding problems.

Chernomyrdin 'more optimistic'

Russian envoy Viktor Chernomyrdin says he is "more optimistic" about a solution to the Kosovo crisis, after meeting President Clinton and United Nations Secretary-General Kofi Annan in the US.

"It is easy to start a war but it takes an enormous effort to stop it, and we will not stray from that," the former prime minister said on his return to Moscow.

Refugees continue to bring tales of atrocities

Following their meeting, Mr Chernomyrdin said there would be a Russian element to any international presence in Kosovo.

The UN secretary-general intends to appoint two special envoys of his own who will work closely with Russia in their attempts to search for a solution.

Mr Annan has asked Yugoslavia for permission to send a UN humanitarian team into Kosovo to assess the situation on the ground.

• Two die in Apache crash
• UK to take 'thousand refugees a week'
• US Senate shelves Kosovo motion
• Politics 'hurt' Nato strikes
• Clinton praises soldier releases
• 'Soft bombs' hit hard