George Robertson: There will be no escape for Milosevic

And he warned him that there would be "no escape" for his troops active in Kosovo.

He said the Serbian statement was an "inadequate and spurious" offer but represented the first crack in President Milosevic's "wall of obstinacy".

Mr Robertson confirmed that Nato was to carry out round-the-clock raids against Serbian targets until Mr Milosevic accepted the following terms:

• An immediate and permanent halt to the killings in Kosovo.

• A verifiable withdrawal of Serbian troops.

• An agreement to allow an international peacekeeping force into Kosovo, which would oversee the return of ethnic Albanians to their homes.

Mr Robertson said: "Milosevic has a choice. He can meet these terms or he can face renewed and continued attacks."

He summarised President Milosevic's offer as "Nato stops the bombing and he slows down the killing."

Mr Robertson said: "There was no offer to pull out troops even to the levels suggested by Milosevic in October."

He said the offer showed that Mr Milosevic was "blinking in the face of the blows" inflicted by Nato.

Duncan Kennedy: The arrival of aid is bringing hope but much more is needed

In further developments the MoD has translated its Kosovo crisis Website into Serbo-Croat to counter what it called Serbian propaganda.

It has also revealed details about contacts between Serbia and Iraq.

Mr Robertson said Nato aircraft and missiles were targeting Serbian troops in Kosovo who were believed to be carrying out "ethnic cleansing".

'We know where troops are hiding'

He said: "We know where they are dispersed and we know where they are hiding. They are not going to escape and there will be no rest and no opportunity to complete their evil work or entrench Milosevic's position."

Mr Robertson said: "Day by day we will continue to weaken his killing machine until it is brought to a halt."

Exodus: Harriers aiming for those attacking refugees

He said he had given permission for five US B-1 bombers to station at RAF Fairford, in addition to the 13 B-52s already using the base.

The defence secretary said he was also concerned by reports about plans by President Milosevic to destabilise Montenegro's President Milo Djukanovic.

He said Nato was watching the situation in Montenegro closely and he expressed his support for Mr Djukanovic.

The Chief of the Defence Staff, General Sir Charles Guthrie, gave figures for the damage wreaked to Serbian targets in the first five days of the campaign.

He said the Nato forces had:

• Carried out 90 attacks against 70 sites.

• Hit eight airfields, destroying seven aircraft and one helicopter on the ground.

• Shot down four "state-of-the-art" Mig-29 jets and one Mig-21 fighters.

• Attacked 16 radar and early warning stations and 18 surface-to-air missile sites.

Sir Charles also confirmed for the first time the military and economic links between Belgrade and Baghdad - the capitals of what he described as the "two pariah states".

He said there had been a "continuous two-way flow" between the two capitals.

This included visits by Yugoslavian military officials to Iraq, presumably to learn how best to counter air attacks.

In return Mr Milosevic has been helping to re-supply Iraq, said Sir Charles.

Mr Robertson said the propaganda war between Belgrade and the West was also hotting up and added: "They tell lies about us. We will go on telling the truth about them."

General Sir Charles Guthrie: "There exists between Iraq and Serbia a marriage of convenience"

He said the Ministry of Defence's own Kosovo crisis page had been translated into Serbo-Croat so that Yugoslavs with personal computers could access "the truth" about the air strikes and the situation in Kosovo.

Meanwhile, Air Chief Marshal Sir Richard Johns praised the performance of his service's Harrier GR7 planes after poor weather put paid to another air strike.

During a morale-boosting visit to the Gioia del Colle base he said: "Some of the battle damage assessment photographs that I have seen, particularly of a couple of weapons dumps, God alone knows how many tons of ammunition were in them but my God there was an explosion."