The BBC's Jacky Rowland: "After 10 years of war and crisis, the people want a change"

The move comes on the eve of a Belgrade rally calling for the resignation of Yugoslav President Slobodan Milosevic.

A BBC correspondent in Belgrade says the announcement is aimed at catching those opposed to Mr Milosevic while they remain divided.

She says it has also been timed to defuse the impact of the Belgrade rally.

The Serbian parliament will meet next month to set a date for the election - likely to be in November - the independent news agency Beta reported.

More than 20,000 people took part in an opposition rally organised by the Alliance for Change coalition in the southern Serbian city of Nis on Wednesday.

Deal with opposition leader

Protests against Milosevic are growing

BBC correspondent Jacky Rowland says the elections could also embarrass the international community, which will have to decide whether Kosovo should be included in the poll.

She says the announcement could be the result of a deal between President Milosevic and the maverick opposition leader, Vuk Draskovic.

It comes two days after a meeting between the two men, fuelling speculation that they have forged a deal which will involve Mr Draskovic staying away from the Belgrade rally on Thursday.

Mr Draskovic has already announced that he will not be speaking at Thursday's rally.

Early hints of election

He was in government with Mr Milosevic during the conflict with Nato and seems to be contemplating another deal with the president, says the BBC correspondent.

The BBC's Jacky Rowland: "He is trying to steal the thunder"

The election plans do not come as a complete surprise.

In a BBC interview earlier this month, the Socialist Party spokesman, Ivica Dacic, said his party was ready for elections, but he denied rumours that the governing coalition was drawing up an election manifesto.

However it was also reported on Wednesday that support for the opposition groupings in Serbia was growing.

An opinion poll conducted by the Belgrade-based Partner agency showed that support for the opposition Serbian Renewal Movement led by Mr Draskovic and the parties gathered around the Alliance for Change group was on the increase.