The UN Interim Administration Mission in Kosovo (UNMIK) said today that troops of the international peacekeeping force, KFOR, immediately cordoned off the area for investigation. KFOR spokesman Major Scott Slaten said Explosive Ordnance Disposal Teams were sweeping the building for additional explosive devices that may still remain.

The bomb was detonated in the rear of the Political Parties Services Centre of the Organization for Security and Cooperation in Europe (OSCE). OSCE is UNMIK's lead agency in democracy and institution building.

Commenting on the explosion, the head of UNMIK, Dr. Bernard Kouchner, said he was convinced that "the enemies of democracy" -- extremists from Belgrade and Kosovo -- would try to "sap our efforts" and "spoil" the elections to be held in Kosovo on 28 October. But, he said, "We are ready and prepared to ensure security as much as possible."

There was also a bomb threat at the police station and UN offices on nearby Kragulevac Road in the centre of Pristina this morning but the threat is now over, UNMIK spokeswoman Claire Trevena said.

The regulation, which will be effective after the local elections on 28 October, accords to the municipalities a range of responsibilities, including basic social services and amenities such as education and primary health care, UNMIK said in a statement.

In addition, municipalities may take on other activities such as tourism, economic promotion, civic promotion, sports and leisure.

Municipalities will have the right to make their own local regulations so long as they are not in conflict with applicable law. They will also have a duty to implement regulations from the central authority, UNMIK said.

The head of the UN Mission will still maintain overall control and can set aside a decision of a municipality if it does not take into account the rights of minorities or if it runs counter to the UN Security Council Resolution 1244 which established UNMIK.

Dr. Kouchner has also signed an administrative direction regulating the activities of sports federations, associations and committees in Kosovo. The direction makes it mandatory that 30 per cent of the members of these organizations be women and that 10 per cent be from the ethnic minorities.

The sports organizations are also expected to promote sports in the spirit of tolerance and Olympic ideals of peace, solidarity, friendship and fair play.

Mr. Bislim Zyrapi, one of the two co-heads of the Department of Civil Security and Emergency Preparedness, said that a regulation was being drafted which would cover the implementation and maintenance of the directive under which the KPC had been established last year.

Mr. Roland Nilsson, the other co-head of the Department, told the Council that the KPC was intended to be the government emergency response organization, mainly targeting the consequences of natural disasters, forest fires and chemical accidents. In addition, the KPC would have the capacity for humanitarian assistance and for support to rebuilding infrastructure and communities.

General Ceku said the demilitarization and transformation of the former Kosovo Liberation Army into the KPC was a great achievement for Kosovo. He said he recognized that there was a problem of perception in the international community about the KPC and it was essential to change the negative perception created by "unfounded accusations" against the KPC.

General Ceku pointed out that the funding for the KPC could be affected by such impressions. Responding to a question, he acknowledged there were arms in Kosovo, but said the KPC had nothing to do with them.

Asked about the killings of minorities during the last year, General Ceku categorically denied that the KPC members had been involved in any such violence.

He said the KPC had a sanctioned strength of 5,000, with 2,000 of these being reservists. At present its strength is 4,604, with the other positions still vacant for want of members from the minority communities. He urged the minority communities to come forward and join the KPC.

Mr. Toepfer, who is also the executive director of the Nairobi-based United Nations Environment Programme, said the launching of the Housing and Property Directorate (HPD) marks an important step for Kosovo.

"Resolving disputes over property in a fair and impartial manner is a vital part of establishing a stable and democratic society. It is a precondition for restoring the rule of law and the protection of human rights," he said.

The HPD, established under Regulation 1999/23 of the United Nations Interim Administration Mission in Kosovo (UNMIK), shall provide overall direction on property rights in Kosovo. The Housing and Property Claims Commission (HPCC), launched at the same time, is an independent organ of the HPD which shall settle private non-commercial disputes concerning residential property referred to it by the Directorate.

"The launching of the HPD and HPCC has been eagerly anticipated by both the local and international community, and it has the full support of UNMIK," said Mr. Tom Koenigs, the Deputy Special Representative of the Secretary-General for Civil Administration. "Charged with the responsibility of settling the numerous disputes that have emerged as a consequence of the recent history of Kosovo, the work of HPD and the HPCC is critical for the process of building peace in Kosovo."

At the press conference accompanying the launch, Mr. Toepfer announced the appointment of the first panel of three commissioners for the HPCC, chosen for their experience in handling property disputes. They included Mr. Alan Dodson, chairman of the commission, who for the last five years was a judge of the Land Claims Court in South Africa; Mr. Veijo Heiskanen, who has been working with the Legal Services Branch of the UN Security Council in the UN Compensation Commission; and Mr. Aqif Tuhina, who served as a judge of the Supreme Court of Kosovo for several years.

After touring the plant, he said the state of disrepair was far worse than what he had expected. "This will be a huge task. This factory is in a desperate state, " he said.

He described his tour as "very moving visit," saying that it was "unacceptable" that people were working at the factory "as slaves" in highly toxic conditions in order to feed their families. Some 600 people worked in the factory.

Dr. Kouchner blamed the former plant management, who operated the smelter without environmental controls and without ensuring that the workers' health was monitored.

UNMIK closed the plant down on Monday because of the health risks it was causing through pollution. Blood tests of soldiers of the Kosovo Force (KFOR) serving near the smelter, which were taken in August, found their blood lead levels to be unacceptably high. "We have seen high lead levels in the blood tests already taken," Dr. Kouchner said. "This is a crime. People were really in danger."

He said that the surrounding community was also at risk and that pregnant women had left the area to deliver babies.

Dr Kouchner said a financial and environmental audit of the entire Trepca mining and metallurgy complex, of which the Zvecan smelter is a part, would begin immediately. But the $16 million targeted for the upcoming period would be inadequate given the major repairs that seemed evident from the day's tour, he said.

Asked by the media whether taking control of the plant also meant taking control of the Serb-dominated northern Mitrovica, Dr. Kouchner replied that, " We are not acting against the Serbs, but in favour of the Serbs. We will refurbish this very old dinosaur and we will re-open it as soon as possible for them."

. In a statement issued after today's meeting, the KTC said it was "alarmed at reports of worsening detention condition for Kosovo prisoners held in Serbia."

The KTC expressed concern that one of the deceased, Adem Cali Sallahu, who is reported to have died on 21 June in Pozarevac prison, "did not receive adequate medical care" and that his family had been unable to visit him in jail.

According to the statement, the circumstances of death of Mr. Salahu, as well as Shkelzim Halit Zllanoga, who died on 8 August in Nis prison, remained uncertain.

"The budget is a highly political matter, so we discussed it for a long time," the head of UNMIK, Dr. Bernard Kouchner told the media following the IAC meeting. "After consultations with the administrative departments and Central Fiscal Authority (CFA), we have decided how to distribute among the different departments the 430 million deutsche marks ($200.64 million) in the Kosovo Consolidated Budget."

Kosovo is required to operate a balanced budget. Since local revenues have been less than anticipated, the CFA has been faced with a choice of having to cut the budget, raise taxes or seek additional donor support, the UNMIK statement said.

Rather than reduce the budget, the CFA has proposed that new expenditure pressures be accommodated within the budget by re-arranging existing budgets, while asking donors to consider further contributions to both the Kosovo Budget and the Kosovo Protection Corps.

The IAC also endorsed a regulation on licensing requirements for import, manufacture, sale and distribution of pharmaceutical products, UNMIK said.

The agreement marks the start of the second phase of UNMIK's strategy to restore the huge mining complex to economic and environmental viability. "Now we can get to work to bring Trepca back to life and back to the people of Kosovo", said Dr. Bernard Kouchner, the Secretary-General's Special Representative.

By employing a workforce of about 2,000 workers from all communities, Dr. Kouchner said, a revived Trepca could alleviate tensions and promote peaceful co-existence.

ITT Kosovo is a joint venture of TEC-Ingenierie of France, Boliden Contech of Sweden and Morrison Knudsen International of the United States. The consortium will produce a financial viability study in addition to an environmental mitigation plan, and will take remedial actions including repairing or replacing safety and production equipment. This development is part of a wider effort to regenerate Kosovo's industrial power base.

These payments, known as Category I payments, replace the emergency financial assistance that had previously been available. "We estimate that as many as 23,000 families will be included in the first set of payments," said Evelyn Arnold, the co-head of the Social Welfare Department.

The new payments are aimed at families who cannot earn an income because of age or disability. A Commission of Doctors has been set up to verify whether people really are incapable of working.

In most communities, the payments are being made through the Banking and Payments Authority of Kosovo (BPK). For minorities who are unable to go and collect their money, special arrangements have been made.

UN administrators, supported by UN police and the Kosovo Force (KFOR), took control of the smelter this morning, in an effort to safeguard the health of the community after levels of lead in the atmosphere went up dramatically since the resumption of the plant's operations in June. Levels of lead in the air were 200 times internationally accepted standards, according to UNMIK.

"The people of Mitrovica are at risk because of this smelter," said the Secretary-General's Special Representative, Dr. Bernard Kouchner. "As a doctor, I can tell you that lead poisoning can have tragic consequences for families. It can mean irreversible damage to children and complications for pregnant women."

The UN Mission informed smelter workers that they would continue to be paid pending a retrofit of the plant, whose extent, cost and duration was being determined by a comprehensive assessment under way.

In a related development, UNMIK took action to improve management of northern Kosovo's Trepca complex, which includes the Zvecan smelter. On Sunday, the Mission concluded an agreement with a US/French/Swedish consortium to assess the viability of the entire Trepca complex.