Following the latest peace mission to Belgrade by the Russian Balkan's envoy, Viktor Chernomyrdin, Yugoslavia reiterated its acceptance of the general principles drawn up for a settlement by Russia and the seven other G8 nations.

Mr Chernomyrdin returned to Moscow on Friday after declaring himself "very satisfied" with talks held with Yugoslav President Slobodan Milosevic. Some leading politicians in Belgrade who have been lobbying the president to find a diplomatic solution were said to have been celebrating after the latest talks.

One source close to government told the BBC there had been a psychological shift on the part of the Yugoslav leader.

Montenegrin President Milo Djukanovic, who has accused Belgrade of trying to destabilise his government, welcomed the reports.

Russia frustrated

Viktor Chernomyrdin (right) says he may return to Belgrade next week

But shortly after Mr Chernomyrdin left Belgrade on Friday evening, Nato planes attacked Yugoslav targets once more.

On Saturday, Russia accused the West of failing to appreciate its peacemaking efforts.

Foreign Minister Igor Ivanov was quoted by Russian media as saying: "Russian efforts and the direct efforts of ...Chernomyrdin, have not found the understanding of the leadership of Nato, which continues to insist Belgrade accept the alliance's demands."

Nato's cautious reaction

In Paris, the French and German leaders called for an early meeting of the G8 countries to consider the developments from Belgrade.

The BBC's correspondent in Paris, Stephen Jessel, says President Chirac and Chancellor Schröder agreed that signs from Belgrade that it was willing to accept the G8 conditions were worth following up, initially by officials, later if justified by ministers.

But President Chirac's answer was unequivocal when asked if President Milosevic now had room for manoeuvre in negotiating an end to the conflict. "No. He doesn't have any," he said.

Nato Secretary General Javier Solana's reaction was also cautious. Speaking on Saturday via a live link from Italy to reporters at Nato's daily briefing in Brussels, he said: ""I don't have any fresh information. We welcome of course any diplomatic effort to help Belgrade accept the position of the international community."

Campaign's 'significant impact'

Wesley Clark and Javier Solana on Saturday signalled no let up in the Nato air campaign

Standing beside Mr Solana, the supreme allied commander Wesley Clark, emphasised what he called the "significant impact" of the continuing air campaign.

"No army can stand the continual losses day after day in a campaign of indefinite duration on the ground in Kosovo," he said.

Correspondents say Nato leaders are acknowledging the apparent progress on the diplomatic track without having a special faith that it is leading anywhere.

It is important for Nato unity and for the sake of relations with Russia that every avenue to a peaceful settlement is seen to be pursued.