Ethnic Albanian guerrillas were besieged by Serbian forces in the far west of Kosovo yesterday while fighting was reported elsewhere across the province.
Serbian forces were threatening the village of Junik, a stronghold of the secessionist Kosovo Liberation Army (KLA) close to the border with northern Albania.
The main road from Pristina to Prizren was closed because of shooting from guerrillas.
"They are losing now and they are going nuts," a policeman at a checkpoint near Stimlje, southwest of Pristina, said. "They are shooting at anything that moves. They have put mines on the road." He said that three of his colleagues had been injured in the fighting, one seriously.
A week-long offensive by Serbian forces has scored major gains against the KLA. At least 500 people have been killed and 150,000 displaced in five months of fighting. Local estimates say 50,000 people have been uprooted in the latest fighting.
Western nations are hoping that the setbacks for the KLA will bring ethnic Albanians and Serbs more easily to the negotiating table. There were signs yesterday that negotiations were indeed getting closer.
The Yugoslav President, Mr Slobodan Milosevic, told the United States that he wanted talks to begin with representatives of ethnic Albanians in Kosovo as soon as possible. In a statement issued after meeting the US special envoy for Kosovo, Mr Chris Hill, he said the problem of Kosovo had to be resolved by political means.
In Pristina, the ethnic Albanian leader, Mr Ibrahim Rugova, said he was close to announcing the formation of a "government". It is thought that this would form the basis of the team that would negotiate with Belgrade to seek an end to the violence.
The movement comes a day after Mr Milosevic, who has been under intense international pressure, told visiting European Union officials that the major military offensive was over. He matched his pledges with a call for the EU and United States to lift sanctions imposed when the offensive against Kosovo separatists began.
The charity worker Ms Sally Becker returned to Britain last night after being freed from a Yugoslavian-run jail in Kosovo. A British Foreign Office spokeswoman said the Yugoslav authorities had decided to release her and that she was deported from the region.
Ms Becker (37), called the "Angel of Mostar" for her humanitarian work in Bosnia, had been seriously ill during her time in the prison in Lipjan. She refused food and fluids for five days in protest at the situation in Kosovo.