State news agency Tanjug said Mr Milosevic "fully and exclusively" blamed the Nato-led peacekeeping force K-For and the UN mission in Kosovo for the "horrible massacre".

Nato and international officials have appealed for calm in the province.

Serb villagers said the Kosovo Liberation Army had carried out the killings, which happened on Friday evening.

Clarence Mitchell reports: "In a village as small as this, everyone has been affected"

It was the worst attack on Serbs since the arrival of the international peacekeepers in June.

"The massacre of Serb farmers, women and children in the village Gracko is a direct consequence of inadmissible failure to carry out the UN resolution and military-technical accord by the UN civilian mission and K-For," Mr Milosevic said.

On Friday, General Nebojsa Pavkovic - the commander of the Third Army and an indicted war criminal - said Yugoslavia retained the right to send its troops back into Kosovo if the United Nations was not in control there.

The chief prosecutor of the War Crimes Tribunal for former Yugoslavia has ordered an immediate investigation into the massacre.

In a written statement, Louise Arbour said she was "gravely concerned".

"The scale of this massacre is very alarming and suggests that the strongest deterrent message must be sent to those who are inclined to perpetuate the cycle of violence that has shattered Kosovo in the last year," she said.

The United Nations administrator in Kosovo, Bernard Kouchner, has visited the site and called the massacre inhumane and senseless.

He said the killers must be brought to justice without delay.

The BBC's Nick Childs: "Nato has condemned the shootings as a despicable act"

The head of K-For, General Mike Jackson, said the deaths must not be a catalyst for further bloodletting.

The leader of the KLA, Hashim Thaci, also condemned the attack and said the KLA would do its best to help track down the killers.

In an interview with the BBC, he said the killings were designed to wreck the improving relations between Kosovo Albanians and Serbs.

Gunfire alerts troops

Major Jan Jooston of K-For said that a British patrol had visited the site of the killings five hours before the bodies were found and found nothing strange.

General Jackson said: "We cannot be everywhere all the time."

Alan Grady reports: "There's little doubt here that the killings were an act of revenge"

The alarm was raised at about 9.13pm local time, when British troops heard gunfire and called in a quick reaction force.

The bodies of 13 males were discovered next to a combine harvester on a dirt track by an open field. A 14th body was found on a tractor 150m away.

The Serbs had apparently been grouped together in a circle and shot dead, Major Joosten said.

Canadian troops sealed off the site and the bodies were taken to a hospital in Pristina to be identified.

Nato said the village was home to about 80 Serb and two Albanian families, who had lived together peacefully.

Arms handover

The mass killing came as K-For continued its campaign to try to reduce the number of firearms in Kosovo.

On Saturday, K-For and KLA commanders met to assess whether the KLA had met its latest disarmament deadline.

General Jackson said he was broadly satisfied that last Wednesday's decommissioning target had been achieved.

The KLA was to have handed in all heavy weapons and a third of its small arms by then.

General Jackson said inspections of weapons storage sites by peacekeeping troops indicated that this was the case.

He said there were still some small discrepancies in numbers, but these were "an accounting problem" rather than a failure to hand over weapons.

A meeting scheduled for Thursday was postponed at the request of the KLA apparently because of differences between the figures calculated by the two sides.