However a Nato spokesman said it had been "a very constructive day of very positive talks".

Lieutenant-Colonel Robin Clifford said the Serbs needed to confer with Belgrade on "a few points of detail" in the withdrawal plan.

The two sides met for five hours at an ethnic Albanian-owned cafe just inside Macedonia's border with the province.

(Click here to see a map of forces on the ground)

There was a three-hour delay in starting the meeting because the Yugoslav delegation was unhappy with the venue.

Ben Brown in Blace, Macedonia: Nato soldiers are standing by to move into Kosovo

The alliance said it would not negotiate during the meeting. Nato's senior commander, General Michael Jackson, was expected to present the Yugoslavs with an agreement for them to sign.

As Nato laid out its demands, Serb nationalist leader Vojislav Seselj threatened to take his Serbian Radical Party out of the Serbian government coalition if the peace plan was signed.

Nato's ultimatum

Nato said it would give the Yugoslav army one day to prove it was withdrawing from the province - and only then would bombing be suspended.

Yugoslavia would have seven days to pull out all 40,000 troops after signing the agreement. It has been given maps showing the exact routes and exit points its forces must take.

The BBC's Ben Brown said Nato forces would start moving in as soon as any Yugoslav withdrawal began - possibly as early as Monday.

Nato Spokesman Jamie Shea: Yugoslavs will be told what they have to do

As the prospect of a pullout improved, Nato warned both sides not take advantage of the situation.

Spokesman Jamie Shea told Yugoslavia that Nato would not hesitate to use its air power if retreating troops exacted reprisals against ethnic Albanian civilians.

But he also had tough words for the Kosovo Liberation Army, saying Nato expected them to exercise restraint once the Serbian forces moved out.

As Russia repeated calls for an end to the bombing campaign, Nato said it would welcome Russia's participation in the implementation of peace.

The UK Foreign Secretary, Robin Cook, said he was confident an agreement would be reached whereby Russian peacekeeping troops would effectively be part of a Nato-led command structure.

Another night of raids

Nato continued its air strikes overnight, but they were confined to targets in Kosovo.

BBC Defence Correspondent Mark Laity says Nato wants to avoid the risk of civilian casualties this late in the campaign.

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

However, the Yugoslav state news agency Tanjug said Nato had dropped five cluster bombs on civilian targets on the Prizren-Djakovica road on Saturday morning.

Elsewhere, international monitors reported the heaviest Yugoslav shelling on the Kosovo-Albanian border for almost two weeks.

On Friday evening, shells landed as far as 15km inside Albanian territory.

UN gets into gear

On the diplomatic front, efforts to restore peace in Kosovo are being stepped up at the United Nations.

UN Secretary-General Kofi Annan has said work could begin next week on a Security Council resolution setting out the terms of a peace settlement.

He also said the special Balkan envoys, former Swedish Prime Minister Carl Bildt and Slovak Foreign Minister Eduard Kukan, were to discuss plans with UN agencies in Geneva on the reconstruction of Kosovo and the rehabilitation of refugees.

Mr Annan has suggested a single individual appointed by him should be in charge of a wide range of functions, including the return of refugees, policing and reconstruction.

International aid workers have warned that there may be a stampede for the border once the refugees believe it is safe to go back.

It will be Nato's job to ensure the refugees' security. Alliance officials have warned that one of the biggest dangers could be mines and booby traps left behind by retreating Yugoslav forces.

• Will the refugees go home?
• Belgrade looks ahead
• KLA: The fight goes on
• What the Serbs have been told
• Q & A: Did the Serbs lose out?
• Full text of the peace document

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