The declaration, "Building peace and prosperity", was signed by leaders of political parties representing Albanian, Serb and Turkish communities.

A statement by the United Nations Interim Administration Mission in Kosovo (UNMIK) said Gnjilane is the second municipality to issue such a declaration. Last week, Pristina issued a similar declaration.

The declaration, which UNMIK spokeswoman Nadia Younes described as a "very heartening development", supports the detention, prosecution and indictment of all criminals and terrorists without exception.

It was signed by the leaders of the Democratic League of Kosovo, the Serbian National Church Council, the Turkish Democratic Union, the Centre Liberal Party of Kosovo and the Social Democratic Party of Kosovo.

The project, to be funded by Norway, aims to promote local self-government and people's participation in the management of public affairs, as well as decentralizing and empowering local authorities to fully respond to the needs of people.

The United Nations Development Programme (UNDP) will execute the project to be launched next month. Known as "Building the Capacities of Municipalities in Development Management", the project will be launched in a pilot phase in the ethnically diverse municipalities of Kamenica in the Gnjilane region and Dragash in the Prizren region. Based on the experiences gained from the the two municipalities, the project will be expanded to all other municipalities.

At the end of the project, the Department of Local Administration will have reliable municipal development information data; mechanisms for consultative and participatory process of planning, management and coordination of development activities; trained municipal staff and local trainers; as well as municipal development plans based on community priorities.

The head of UNMIK, Dr. Bernard Kouchner, and the leader of the Serb National Council (SNC), Bishop Artemije, signed the Joint UNMIK-SNC Understanding which lays down the "concrete steps" to be taken. On the basis of the Understanding, the SNC agreed to participate in the Joint Interim Administration Structure as observers for another three months.

Describing the occasion as "an important moment" for Kosovo, Dr. Kouchner said UNMIK was determined to improve the level of security for all communities in Kosovo, especially the Serb community.

The understanding foresees eight specific measures to be taken by UNMIK, including the development of a Special Security Task Force to protect Serbs and the deployment in Serb areas of a greater number of Serb members of the Kosovo Police Service.

Other measures include the appointment of one international prosecutor and two international judges in each district court across Kosovo; the safe and orderly returns of Serbs back to their homes in Kosovo; finding and freeing all missing persons in Kosovo; the delivery of essential public services to Serbs; and the protection of the Serbian religious and cultural heritage.

The head of UNMIK, Dr. Bernard Kouchner, who had just returned to Kosovo from visiting the European Union and France, told a meeting of the Kosovo Transitional Council (KTC) yesterday that it was not easy to secure extra funding for Kosovo because of continuing violence and because Kosovars "were not forthcoming on registration and elections."

Dr. Kouchner also said that France had agreed to provide extra financial support to aid the return of displaced persons and refugees and he was hopeful that other nations would follow that initiative.

Also briefing the KTC was the Deputy Special Representative of the Secretary-General, Mr. Tom Koenigs, who said that it was estimated that 1.3 million people would register by 15 July, the close of the civil registration period. Over 700,000 people had already registered.

The decision followed "positive statements" made by Yugoslav Foreign Minister Zivadin Jovanovic, who assured UNHCR that those responsible for the violence that led to the suspension of activities last Thursday would be brought to justice, a UN spokesman said in New York.

Other humanitarian agencies have also resumed their operations in the Serb-dominated part of the town.

The suspension of humanitarian work followed a riot in northern Mitrovica last week in which a crowd of Serbs torched and stoned dozens of UN and humanitarian vehicles and scuffled with police.

Following a meeting yesterday with humanitarian agencies, the Serb political leader in Mitrovica, Mr. Oliver Ivanovic, publicly declared that the Serb National Council would work closely with UNMIK Police and the international peacekeeping force, KFOR, to improve the security for the humanitarian workers in northern Mitrovica and would provide all measures for their protection, the United Nations Interim Administration Mission in Kosovo (UNMIK) reported today.

Mr. Ivanovic also declared his support for the arrest of the perpetrators of the violence and pledged not to hide them, UNMIK spokeswoman Nadia Younes said.

The regulation lays out the number of municipalities and assembly members, their competencies, as well as that of president and chief executive officer. The regulation also spells out the competencies of the Special Representative of the Secretary-General and the municipal administrators being his representatives.

Based on wide consultations with international organizations, the draft regulation could serve as a permanent legal framework, the Deputy Special Representative of the Secretary-General, Mr. Tom Koenigs, told the IAC.

IAC members raised a number of questions and objections, especially regarding the role of the local community offices, as well as presenting written comments, according to a statement issued by the United Nations Interim Administration Mission in Kosovo (UNMIK).

The IAC also established a group of experts, who will meet tomorrow to continue discussions on the draft regulation at a technical level.

In addition, the Council endorsed the regulation establishing the Department of Sports, which brings to 13 the number of departments that have been formally set up under the Joint Interim Administrative Structure.

The incident occurred Friday night, when a large crowd of Kosovar Serbs stormed the UNMIK offices in the town, destroying everything inside, including computers, files, windows, doors and furniture. The offices of local Serb employees, except for that of a Serb viewed as being a "moderate," were left untouched.

In a statement, Dr. Kouchner said the events in Strpce were "well coordinated and organized by persons not from the area." These acts of vandalism, he said, were "unacceptable and must stop." The attack followed the disappearance of a Kosovar Serb shepherd from the area.

In another incident yesterday, one Kosovo Serb was killed and one injured by gunfire in the town of Kosovo Polje. The ethnicity or motive of the attacker is unknown.

Meanwhile, Dr. Kouchner, yesterday welcomed the decision taken by the Serb National Council (SNC) to rejoin the Interim Administrative Council and the Kosovo Transitional Council as observers after a temporary suspension two weeks ago.

"This courageous action will allow the Kosovo Serb representatives once again to play their rightful role in building a democratic, peaceful and tolerant Kosovo," he said.

Following talks on additional measures on security and freedom of movement, UNMIK and the SNC are expected to sign an "Understanding" later this week containing concrete steps to improve the life of the Serb community, according to an UNMIK statement.