The three, who were detained in Orahovac, in the southern sector of Kosovo, are suspected of involvement in looting, arson and the murder of an Albanian earlier this year.

The arrests were ordered by the head of the United Nations mission in Kosovo, Bernard Kouchner.

German and K-For officials did not release the identities of the men or say when they were captured.

Russians to take control

The operation in the southern sector of Kosovo, under German command, was part of the K-For peacekeeping effort to establish a stable and secure environment, said Major Roland Lavoi.

The BBC's Paul Wood: "Sadako Ogata says most of the revenge attacks are against the old and the vulnerable"

German Defence Minister Rudolf Scharping announced the arrests in Bonn earlier in the day. He said the three men were handed over to the United Nations' Mission in Kosovo, Unmik.

They were arrested on the basis of evidence supplied by the international tribunal for former Yugoslavia in The Hague, Netherlands.

The area is in the German-policed sector of Kosovo. Dutch troops have been responsible for the town itself, but they were to pull out this weekend and hand over to Russian troops.

Serb fear

The arrests came as the UN's refugee chief sounded the alarm over the exodus of tens of thousands of Serbs and gypsies from Kosovo.

Sadako Ogata says the number of Serbs in Kosovo has dropped dramatically

Speaking in Tokyo, Sadako Ogata said the number of Serbs in Kosovo had dropped dramatically since Nato's 11-week campaign of air strikes, which ended in June.

"The number of Serbs in Kosovo before the conflict was estimated to be about 200,000," she said.

"This is just a rough guess but at least we are aware that 170,000 have already left.

"There are a lot of attacks, personal attacks on Serbs who are staying on," Mrs Ogata said.

There were only about 2,000 Serbs left in the capital Pristina, she said, compared to 40,000 before the conflict.

The situation for gypsies suspected of collaborating with Serb oppression of Kosovo Albanians in the province was even worse, she added.

Kosovo's 'test'

In Kosovo, the Albanian leader Ibrahim Rugova said the ability to protect Kosovo's diminishing Serb population was a "test" of ethnic Albanian political groups before the world.

Ibrahaim Rugova: Serbs must be protected

Mr Rugova, a moderate, said Kosovo Albanian politicians must stop the revenge attacks and protect the remaining Serbs.

"We must set an example before the United Nations and the rest of the world, it's a new test," he said.