The confrontation between Yugoslavia and Nato is entering its third week. Ostensibly, nothing has changed: the Alliance will continue the air campaign until President Milosevic accepts its conditions.

In practice, however, the aims of the war have been in a constant state of flux and soon the West will witness the biggest battle so far, at least on the diplomatic front.

Nato claims that its strategy is working, and that Milosevic's war machine is bleeding under its repeated blows.

The BBC's Jim Fish looks at possible outcomes to the conflict

There is considerable evidence that the Yugoslav military is now running short of fuel because most of the refineries have been damaged.

The destruction of four bridges over the Danube has also created a logistical nightmare for the government in Belgrade.

But almost all the other indications suggest that Yugoslavia will be able to withstand air strikes for quite some time yet, and the weather above the Balkans will get worse in the days to come.

In short, Nato's military strategy cannot be translated into a political outcome. And Mr Milosevic, always the resourceful leader, has muddied the waters even more in recent days.

Assumptions proved wrong

It is now clear that Nato went into the war hobbled by three major assumptions, all of which have been proven wrong:

• The Alliance believed that the Yugoslav military will never risk a confrontation with the West and that Milosevic will back down at the very last moment. The result of this assumption was that Nato hyped-up its threats but curiously did not undertake the necessary preparations for carrying them through.

• Secondly, there was the vaguely racist belief that the "little people" in the Balkans are no match for Nato air power: drop a few bombs on these "natives" in Yugoslavia and they will sue for peace. The idea that Milosevic would simply refuse to compromise and absorb the air strikes was not seriously considered.

• Finally, Nato was addressing two audiences at the same time. While threatening Milosevic with a military Armageddon, the same Alliance commanders were reassuring public opinion in the West that their operation would be "surgical" and limited in scope.

The outcome was that the Yugoslav dictator knew from the start the risks he was undertaking and concluded that they were worth taking.

The story of the last two weeks is, essentially, one of Nato trying to disentangle the knots which were of its own making.

Air campaign 'phases' merged

British Foreign Secretary Robin Cook with Nato's Javier Solana: Western politicians have adjusted their political aims

The Alliance planned on three distinct phases in the air campaigns, gingerly tailored to the political circumstances. The first phase entailed the destruction of Yugoslavia's air defences, to be followed by strikes on Serb forces in Kosovo and, finally, by a more generalised bombardment of military targets throughout the country.

The plan looked good on paper but was basically irrelevant. Contrary to the calculations of Western planners Milosevic did not activate his air defence systems, thereby depriving Nato of its ability to target radar and missile installations.

Meanwhile Milosevic not only refused to negotiate, but actually unleashed his biggest offensive in Kosovo.

As a consequence, the three phases of the air campaign were quickly merged; a strategy which was meant to allow for a careful escalation of pressure on Yugoslavia in order to produce a peace settlement became an aim in itself.

In the process, the list of targets was progressively enlarged and the distinction between civilian and military objectives increasingly blurred.

Bridges and oil refineries joined airports and ammunition dumps. And the temptation to enlarge the military objectives even further grows every day, as the recent dispute over the possible destruction of the Yugoslav television stations indicates.

Shifting objectives

Meanwhile, Western politicians scrambled to adjust their political aims to these shifting targets.

The operation was originally justified as an attempt to prevent a humanitarian disaster in Europe.

When precisely this disaster took place Nato feigned surprise (despite the fact that all the military intelligence agencies predicted this outcome months ago), and committed itself to the return of the Albanian refugees.

In other words, the purpose of the operation shifted from one of preventing a disaster to one of reversing its consequences.

The Alliance remained committed to the original peace plan offered earlier this year, which promised the Albanians a mere autonomy within Yugoslavia.

It knew that once the fighting started this plan was dead, but Nato still cannot commit itself to outright independence for Kosovo, since this will annoy other Balkan countries.

So the West is stuck somewhere in the middle: Kosovo will not necessarily be independent, but it will have something more than just an autonomy.

Furthermore, it quickly became clear that air power alone will not dislodge the Yugoslav forces from Kosovo. But no Western government is yet willing to commit forces for a ground offensive.

Yet again, the Alliance fudged the issue: it is now bolstering its ground forces under the guise of protecting refugees in the neighbouring states.

Two weeks after the "precise" and "surgical" air operation began we are witnessing a war which is partly on the ground and partly in the air, conducted by an alliance which is complaining when Mr Milosevic evicts his people but is also uneasy when he prevents the departure of refugees.

What Nato wants

Nevertheless, the fog of war will be dispelled soon, for the confrontation is now switching yet again to the diplomatic front.

The question is what precisely Nato wants, and what offer from Milosevic will be considered genuine and substantial enough in order to warrant even a temporary cessation of hostilities.

The simple answer is that Nato does not have an answer; much will depend on when the offer for a settlement comes, but also how it is packaged.

The Alliance has to take into account a whole host of political and strategic constraints. The horrific pictures from Kosovo have increased public demands to identify Milosevic as a suspected war criminal.

Governments have resisted this temptation partly because they have doubts about the legal basis for identifying a head of state which is still a member of the United Nations as a war criminal, and partly because they suspect that they may yet have to deal with Milosevic across a negotiating table.

However, if the violence continues the pressure to indict the Yugoslav leader may become irresistible.

Just as importantly, the Alliance has to bear in mind the fact that, the moment air strikes are suspended, even on a temporary basis, it would be very difficult to restart them.

The doubts about the efficiency of air strikes will intensify and Nato will not be able to avoid a debate in the UN Security Council about the mandate for the operation.

In presentational terms, therefore, the Alliance must be sure that when it does consent to sit down for talks with Milosevic these talks will result in a settlement which can be safely presented as a Western triumph, and which can offer reasonable guarantees that air strikes will no longer be needed.

Original demands 'irrelevant'

But, even assuming that these political hurdles are met, what precisely will the Alliance demand from Yugoslavia?

Officially, the conditions for a settlement have not changed:

• Milosevic must accept a complete withdrawal of his forces from the province

• The return of all refugees

• An autonomy for the province of Kosovo and the presence of an international force designed to police the deal for a number of years.

In practice, however, all Nato military planners know that these claims are basically irrelevant. There is no chance that Milosevic will simply accept all these conditions at the same time; this is tantamount to asking him to commit suicide.

And the idea that the Kosovo Albanians would ever consent to return home in exchange for a promise of autonomy within the country whose government has tried to murder them wholesale is plainly idiotic.

But the Alliance is stuck with this package mainly because it cannot admit openly that the final outcome is an independent Kosovo, since this could upset most of the other countries in the Balkans.

Nato's new negotiating tactics

In order to avoid a stalemate, Nato is now tilting towards a new negotiating stance.

It is based on what may be called "front-loading": demanding from Milosevic acceptance of enough conditions even before the serious peace negotiations begin, in order to make sure that, whatever happens, the Alliance will gain a foothold with its ground troops in Kosovo, and therefore retain the initiative.

The shift in Brussels is unmistakable. The return of refugees under the protection of Western forces is now the minimum precondition. According to Alliance spokesmen this can take place irrespective of whether a peace treaty has been signed.

The essential element is that this return of refugees will take place under Western military supervision, a nicer way of saying that Milosevic has to agree to the introduction of Nato troops on his territory even before the negotiations begin.

If Yugoslavia agrees, the air strikes will stop the moment the first convoys of Western forces cross the frontier. If not, almost anything else Milosevic may offer will be rejected as mere window-dressing.

Milosevic's strategy

Milosevic also has a strategy which he has started to unveil. The Yugoslav ruler has basically achieved his most immediate aims.

The Kosovo Liberation Army is destroyed, and at least a quarter of the local Albanian population has been ejected.

Pro-Milosevic demonstrators in Belgrade: Strikes have silenced most dissenting voices

His tactic now is to remove the justification for continuing air attacks without having to attend any peace conference. The closure of the frontiers, coupled with the unilateral ceasefire and the offer to return the captured US soldiers are all part of this charm offensive.

Milosevic knows that if Nato stops the air strikes these will not be restarted.

For the moment, Nato is continuing its operations unabated. But Western governments know that this is not a long-term solution either, because Milosevic still has a few tricks up his sleeve.

The hundreds of thousands of internally displaced Albanians, currently trapped in Kosovo, require food and assistance. Public pressure will soon mount to introduce aid workers into the province in order to render this assistance.

Milosevic will be very happy to accept these humanitarian workers, in the sure knowledge that the West will be faced with a horrible dilemma of either ignoring the plight of the Albanians, or stopping the bombing, probably permanently.

There is still the remote possibility that Milosevic's regime will collapse from within. But, one way or another, the next week will witness the start of a very different situation, one in which Nato either moves to an all-out war against the Yugoslav state, or tacitly accepts that it was check-mated, yet again, by the Balkan arch-manipulator.

All wars begin with clear intentions, carefully-planned strategies and widespread public support. And all end with quite different outcomes.