The deal was signed on Wednesday night after five days of on-and-off talks between Nato and Yugoslav generals just inside the Macedonian border with Kosovo.

Yugoslav Deputy Foreign Minister Neboisa Vujovic has been reported as saying that Serb forces would begin to pull out of Kosovo on Thursday.

(Click here to see a map outlining the Serb withdrawal)

Yugoslavia's state broadcasting organisation said President Slobodan Milosevic had won the war. It said his policies had stopped the aggression against Serbia.

Crowds in Belgrade have been celebrating the end of the conflict with fireworks, car horns and bursts of gunfire.

'Verifiable withdrawal'

However, Nato said the bombing would not stop until the alliance had verified that the Serbian forces were pulling out.

General Sir Michael Jackson: Deal signed

Nato General Sir Mike Jackson said the agreement set out details for a "phased, verifiable and orderly withdrawal" of Serbian forces.

He said a "robust military presence" would secure Kosovo for the return of the refugees, but that bringing the Kosovo Albanians home "will not be an easy operation".

Reuters news agency quoted residents of Pristina as saying Serbs were rampaging through the streets of the provincial capital threatening to kill ethnic Albanians before they quit Kosovo.

General Marjanovic (through an interpreter): "The policy of peace prevailed"

The spokesman for the Yugoslav delegation, General Svetozar Marjanovic, said the deal meant that Yugoslavia's "policy of peace" had won and the war in Kosovo was now over.

In a statement after the talks, he said the agreement had been struck with the "representatives of the international forces under the auspices of the UN" - without mentioning Nato.

Stages of withdrawal

The BBC's Nick Bryant: "Nato troops are poised to enter Kosovo"

US officials have said that under the terms of the deal, Serb forces must leave within 11 days, rather than the seven days that was initially demanded by Nato.

They said the deal divided Kosovo into northern, central and southern zones.

• On day one, evidence of a "significant withdrawal" of Serb troops from the northern zone will trigger a halt to the bombing.
• Five days later, all troops must be out of the southern zone.
• Three days on, the central zone would also have to be cleared.
• Finally, after two more days, all Serb troops should be out of Kosovo.

Gen Jackson warned that if the withdrawal timetable was breached, the agreement required the air operation to resume.

Nato ambassadors in Brussels have formally approved the deal and instructed General Wesley Clark to verify the Serb withdrawal.

Objectives achieved

The BBC's John Simpson: "Everybody knew it was in the offing"

US President Bill Clinton has welcomed the agreement. But he said Nato would "watch carefully" for movements in Serb forces.

UK Prime Minister Tony Blair said the deal meant that all of Nato's demands had been met.

"We must show the same resolve in seeing this agreement implemented as we have in conducting the air campaign," he said.

Withdrawal reported

Even before the deal was signed, Nato said there were indications that Serbs were preparing to pull out from Kosovo.

"Serb forces have slowed down operations in certain areas and have been regrouping for what may be a withdrawal," Nato spokesman Jamie Shea said.

The official Yugoslav news agency, Tanjug, said the first group of Serbian police had left the province on the orders of the Yugoslav chiefs of staff.

BBC Defence Correspondent Jonathan Marcus says Nato pilots appear to have been given orders to avoid attacking Yugoslav units that may be regrouping to withdraw.

UN ready to vote

The United Nations Security Council has said it is waiting for Nato to stop the bombing before it will vote on the draft resolution drawn up by the G8 countries on Tuesday.

Isa Zymberi from the Kosovo Information Centre: "The reaction will be cautious, they know Milosevic"

The draft resolution calls for the Kosovo refugees to return to the province under an international peace force, the disarming of the KLA, and an interim civilian administration for Kosovo under the UN.

Russian involvement in the peacekeeping force is still under discussion. Moscow has expressed objections to its troops coming under Nato command although President Clinton has hinted that he would be prepared to settle for an acceptable level of co-ordination.

US envoy Strobe Talbott is travelling to Moscow to discuss the issue.

Some 17,500 Nato troops - one-third of the projected total force - are already on the ground in Macedonia.

Russian Defence Minister Igor Sergeyev has said Moscow was preparing to send up to 10,000 troops into Kosovo.

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

Nato kept up the pressure on Belgrade by continuing strikes against targets in Kosovo, even as the talks between Yugoslav and Nato military officials were taking place on the border.

• Allies cautious, Serbs claim victory
• Kosovo's Serb exodus
• K-For: How it will work
• Picture gallery: Troops in waiting
• Q&A: What's been agreed?

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