Mr Blair made his remarks as one party in the conflict, the separatist Kosovo Liberation Army (KLA) continued discussions on whether to accept the current peace deal.

The deliberations came amid reports of renewed violence in the troubled Yugoslav province.

In a speech in London to mark Nato's 50th anniversary, Mr Blair urged both sides in the conflict to sign up to the Western-brokered deal.

Mr Blair urged the KLA to give up its arms.

But he also warned Serb President Slobodan Milosevic Western forces would not stand by and allow renewed aggression or human rights abuses in the troubled Yugoslavian province.

"In Kosovo, we will not repeat those early mistakes in Bosnia," Mr Blair said.

"We will not allow war to devastate a part of our continent, bringing untold death, suffering and homelessness."

Mr Blair added: "But political agreement is not enough: the Balkans are littered with agreements that are signed but not implemented.

"Either side can wreck the chances of full agreement, but both must understand their interest in success."

Mr Blair went on to insist that an international force led by Nato was an "indispensable element" in any agreement to bring peace to Kosovo.

The KLA's decision is expected be announced shortly. If it accepts the deal this is likely to increase the pressure on Belgrade to do likewise.

The agreement was hammered out at talks in Paris after both sides in the conflict were forced to the conference table by Western threats.

The international community wants the ethnic Albanians and the Serbs to sign the agreement before or at a peace conference due to start on 15 March.

European defence 'too modest'

Mr Blair also used his speech to try to flesh out his ideas on a common European foreign and security policy.

Mr Blair is seeking reform of Europe's defence

"Europe's military capabilities at this stage are modest - too modest," he said.

And he urged other nations to follow Britain's lead with its strategic defence review and prepare their armed forces for the challenges of the next century.

But the prime minister also made plain he envisaged no role in the new co-ordinated EU defence strategy for European institutions such as the Commission, the Parliament or the Court of Justice.