Yugoslav President Slobodan Milosevic agreed Tuesday to resume negotiations with a moderate Kosovo Albanian leader but said his decision had nothing to do with NATO exercises in the region.

Milosevic said he would meet with Ibrahim Rugova, a political leader of Kosovo's Albanians, and not with the Kosovo Liberation Army, the main militant group fighting to sever the southern Serb province from Yugoslavia. Rugova has been losing support to the militants recently."I see no reason to conduct negotiations with terrorists," Milosevic told reporters after meeting with Russian officials for several hours.

Milosevic said his decision was based on a desire to find a peaceful solution to the conflict, rather than pressure from NATO air exercises over Albania and Macedonia that began Monday.

"I see no connection here," he said.

Milosevic and Rugova most recently met in May, but the Albanians canceled further talks until Serb government troops halted a reported offensive in western Kosovo.

Milosevic met Russian President Boris Yeltsin in the Kremlin Tuesday morning, kicking off a series of negotiations that continued through most of the day.

"It's necessary that the whole world see what we agreed to, so that there should be no steps back," the Interfax news agency quoted Yeltsin as saying after the talks. Grim-faced, Yeltsin told reporters that the negotiations were "not simple."

Both Milosevic and Rugova are losing support among their people.

Even Rugova's most senior aide, Fehmi Agani, admitted last week that contacts with the Kosovo Liberation Army were essential for meaningful negotiation.

The KLA has designated Jakup Krasniqi as its spokesman. But it remains unclear if the group is willing to meet with Milosevic. The KLA said Monday night it would enter a dialogue with Serbian authorities only if security forces were withdrawn from Kosovo and foreign mediators take part.

Since March, more than 300 people have been killed as Milosevic's army and police have cracked down on Kosovo province, where ethnic Albanians outnumber Serbs by 9-to-1. About 65,000 people have been forced to leave their homes.

In the daylong talks, Yeltsin and Milosevic were joined by Russian Foreign Minister Yevgeny Primakov, Defense Minister Igor Sergeyev and Vyacheslav Trubnikov, the director of the foreign intelligence service.

"President Boris Yeltsin once again spoke against any options involving force and in favor of the search of exclusively peaceful ways of settling the crisis," Russian Foreign Ministry spokesman Vladimir Rakhmanin told reporters.

Russia is in an odd position in the crisis, given its uneasy relations with NATO. Russia strongly opposed NATO's eastward expansion last year, and is openly worried about seeing NATO forces close to its western frontier.

Russia also has reasons to support Milosevic and his Serbs, given their common Slavic background. But Yeltsin has found it impossible to support Milosevic's extreme nationalism and violent campaigns, and only disagrees with NATO about how - not whether - he should be stopped.

With tensions on the rise in Kosovo, the U.N. Security Council has approved a one-year extension for the 34,000-member NATO peacekeeping force in Bosnia and the separate U.N. civilian mission there.

The 15 members agreed unanimously Monday to keep the two parallel mission in Bosnia until June 21, 1999. Their current mandates expire at the end of the month.

The world's sluggish response to the outbreak of war in Bosnia in 1992 is often cited by President Clinton and other world leaders in appealing for a robust international action to stop violence in Kosovo.