Serbia's premier told parliament Monday that Kosovo's armed separatists have been defeated and special police units will be withdrawn from the province - a condition demanded by American and European governments to avert a NATO attack.

But Premier Mirko Marjanovic said the Serb crackdown will resume if the rebels stage new attacks.The Kosovo Liberation Army, which is fighting for Kosovo's independence, issued a statement Monday pledging to continue what it called "the holy war" against Serbia and demanding NATO action. The statement also criticized pacifist Kosovo Albanian leaders "whose actions are hindering this holy war."

Hundreds of people have been killed and about 275,000 have fled their homes since Yugoslav President Slobodan Milosevic's forces began cracking down on ethnic Albanians in Kosovo in February.

Kosovo is part of Serbia, the dominant republic in Yugoslavia. Most of Kosovo's ethnic Albanians - who make up 90 percent of the 2 million inhabitants - favor independence.

Sporadic fighting was reported in Kosovo Monday. The Kosovo Information Center, which is close to the ethnic Albanian leadership, reported Serbian shelling in the region of the Suva Reka village and Urosevac town south of Pristina, the provinicial capital.

The Information Center also reported that two ethnic Albanian families, including 15 members, were slain by withdrawing Serb troops in the central Drenica region Sunday. The report could not be independently confirmed.

In the Serb parliament, Marjanovic said the government will grant amnesty to Kosovo Albanians who surrender weapons within the next 10 days, as long as they have not committed "war crimes."

"With this day, anti-terrorist activities have finished and can be renewed only if some new terrorist bandit-terrorist activity appears again," he said.