The BBC's Jacky Rowland: Mr Vollebaek called on Yugoslav security forces to exercise retsraint

Enver Maloku, who was head of the Kosovo Information Centre and a close associate of the ethnic Albanian political leader, Ibrahim Rugova, was shot outside his home and died later in hospital.

International monitors in Kosovo say the killing is likely to set back delicate negotiations to try to free the eight Yugoslav soldiers being held hostage by ethnic Albanian rebels.

News of the shooting came as OSCE chairman Knut Vollebaek warned that time was running out for a solution to the current crisis.

Speaking after talks in Belgrade with Yugoslav President Slobodan Milosevic, Mr Vollebaek called on the ethnic Albanian rebels to release the eight Yugoslav soldiers they are holding, in order to avoid what he described as a major conflict.

'Short of time'

However, Mr Vollebaek said Mr Milosevic had agreed to extend the deadline after which the army might use force to free the soldiers.

The captives are being held in Stari Trg

"I think that it is very important that the KLA knows that we are very short of time," Mr Vollebaek added.

Meanwhile Mr Milosevic warned that his government would not "tolerate terrorist activities" by the KLA.

Before the news of the shooting a senior representative of the KLA had said some of the eight soldiers could be released on Monday or Tuesday.

Bardhyl Mahmuti, who speaks for the KLA in Europe, called for the Serbian authorities to release some of the ethnic Albanians they are holding in return.

He said the eight officers were not hostages: "This is a conflict between two armies. They are prisoners of war."

Bardhyl Mahmuti: Called for talks on a settlement

The kidnapping prompted the Belgrade government to send army units to the region, although it agreed to hold back from further military action while negotiations were underway.

There are fears that the situation is spiralling out of control with Serbs and ethnic Albanians preparing for renewed war.

The BBC's correspondent in Kosovo says that after losing territory last year, the current truce has given the KLA the opportunity to reorganise and rearm.