Some 4,000 people gathered in the western Serbian town of Sabac to listen to speakers from the opposition umbrella group, the Alliance for Change.

The leader of the Alliance, Zoran Djindjic, told the crowd Serbia would not be able to join the family of European nations as long as Mr Milosevic remained in power.

Correspondents say the rally was a double act of defiance. The demonstrators were in effect also challenging the army high command.

The BBC's Jacky Rowland: "The protest was a double act of defiance"

It has warned the opposition that it will prevent the overthrow of the government.

But Mr Djindjic reminded the army that it had a duty to serve the people.

Reports said Mr Djindjic is due to face a military judge on Wednesday, in what is seen as a test of how far Mr Milosevic will go to suppress his opponents.

Mr Djindjic, head of the Democratic Party (DS), is accused of insubordination for refusing to obey a call-up during the Nato bombing campaign.

Hunger strike

The rally in Sabac came as seven Yugoslav army reservists began a hunger-strike in protest against long-overdue payment of wages earned during the Kosovo campaign.

The Milosevic government has offered payment every six months

The protestors - three of them wearing uniform - sat in a tent near the army headquarters in Serbia's southern town, Nis.

"All those who want to see a Serbian soldier turn to hunger strike to prevent his family from starving tomorrow should be ashamed," said Miodrag Stankovic, who leads an army veterans' group.

Hundreds of reservists have staged a succession of protests in Nis in the past 10 days - but the turnout has dwindled since a promise from the Yugoslav Government that twice-yearly payments would begin on 1 August.

The hunger-strikers insist that they would lose substantially by receiving their pay in six-monthly, rather than monthly, instalments.

The protests have been concentrated in southern Serbia, where most reservists were mobilised and deployed in Kosovo - before and during the Nato bombing campaign.

General strike planned

The Alliance for Change has also announced plans for a general strike in early September in an effort to oust President Milosevic.

It said the protests would include unions, farmers and political parties, the Beta news agency reported.

Many Serbs blame Mr Milosevic's policies for their economic hardship, Nato's bombing campaign and what they see as the loss of Kosovo.

Hundreds of thousands of Serbian civilians have attended opposition rallies in recent weeks, prompting senior military figures to warn of the risks of "people power".

General Nebojsa Pavkovic, commander of the Third Army, warned on Friday that the army might intervene.