Serbian forces captured three more villages in western Kosovo, pushing ethnic Albanian militants away from Pec, the province's second-largest city, media reported Monday.
Yugoslavia's state-run Tanjug news agency said Serbian police "crushed" important strongholds of the rebel Kosovo Liberation Army in the villages of Lodja, Grabovac and Rausic, all just outside Pec.
The push comes a day after the Serbs gained control of Junik, the rebels' main logistical and weapons distribution center. The fighting forced the KLA to flee into the surrounding hills and forests, abandoning weapons and ammunition.
Meanwhile, U.S. and other NATO troops began a five-day exercise Monday in Albania to prepare the alliance for possible involvement in containing the Kosovo crisis.
The exercises, involving 1,700 troops from 14 nations, took place under tight security because of fears following the U.S. embassy bombings in Kenya and Tanzania. Several Egyptians with possible links to extremists recently were arrested in Albania.
In Albania, U.S. Adm. Joe Lopez, commander of North Atlantic Treaty Organization forces in southern Europe, said the maneuvers would send a message "that NATO is just around the corner."
"NATO has a wide range of contingencies and options ranging from peace support to combat operations" to respond to the fighting in Kosovo, Lopez said.
NATO has threatened possible intervention since Yugoslav President Slobodan Milosevic launched his crackdown on ethnic Albanian secessionist guerrillas in February.
The decline in Kosovo fighting has revived hopes for a U.S. diplomatic initiative for a negotiated settlement to the conflict. U.S. envoy Christopher Hill met Monday with Yugoslav and Serbian officials in Belgrade, the capital of Yugoslavia.
The KLA is fighting Serbian security forces for the independence of Kosovo, where ethnic Albanians make up 90% of the province's 2 million people. Kosovo is in Serbia, the dominant Yugoslav republic.