In a statement issued after its regular meeting, the Council also urged all groups to cooperate with the representatives of the international community. "We are alarmed about attacks on peacekeepers by people they have been sent to protect," the statement said.

Meanwhile, UN Interim Administration Mission in Kosovo (UNMIK) spokeswoman Susan Manuel reported in Pristina today that more Kosovo Albanian families have returned to their homes in north Mitrovica, bringing to 58 the number of people who have returned since 3 March.

As of yesterday, 10 Serb families had also registered their desire to return to the homes in south Mitrovica, she said.

Mr. Mario Morcone, the Regional Administrator for Mitrovica, leaves his post today, Ms. Manuel announced. His deputy, Mr. Wahid Wahidulla of Afghanistan, is filling in while a replacement is sought.

In another development, the Deputy Regional Commander of UNMIK Police in Mitrovica, Mr. John Adams, has been moved from his post and is now to work in Pristina. UN spokesman Fred Eckhard said in New York that Mr. Adams' position had been changed "because had had taken a functional problem to the press," adding that reports suggesting that he had been fired are incorrect.

The UN mission in Kosovo has stressed that relations between the UNMIK Police and the international peacekeeping force (KFOR) are very close, and have been getting closer over the past month as events in Mitrovica have heated up, Mr. Eckhard said. KFOR is in charge of security and law and order, while the UNMIK Police are in charge of investigations, he added.

The comprehensive programme of cooperation is aimed at improving the Skopje-Pristina corridor and should lead to a great reduction of delays on the border, UNMIK spokeswoman Susan Manuel told journalists in Pristina today.

"But it is also intended to lay the foundations for future mutual economic and political development and cooperation, " she said.

The agreement was signed in the presence of the European Commissioner for External Affairs, Mr. Christopher Patten, who said the cross-border cooperation was an excellent example of the Stability Pact [for the Balkan countries] in action. The Pact, established by the General Affairs Council of the European Union on 17 May 1999, is a post-conflict economic regeneration and development plan to stabilize the region.

Mr. Patten said the European Union will support the cooperation with 5 million euros ($4.8 million) for a number of projects at the Blace/Hani I Elezit border crossing including renovation of the customs house, a new temporary customs clearance building and improvements to the truck holding area. Other donors within the Stability Pact framework are "keen to be involved", including Germany, the Netherlands and the United States, he said.

The cross-border cooperation programme will start immediately with a series of measures to improve and modernize border infrastructures and facilities on both sides. The agreement includes a commitment to simplify legislative and administrative procedures to reduce costs and move towards harmonization with European Union standards.

In a statement issued after its meeting today, the Council said there could be no excuse for such senseless violence and hatred which hurt all people in Kosovo.

"We want to enable all communities in Mitrovica to lead a normal and peaceful life. This requires a steady process, in which the rights and the security of all national communities in Mitrovica must be respected and ensured," the statement said.

Violence erupted in northern Mitrovica yesterday afternoon following a brawl between a Serb and an Albanian in which some 40 people were injured. The violence came a few days after 38 Albanians who had fled their homes in northern Mitrovica returned under armed guard. UNMIK is not encouraging further returns for the moment, according to spokeswoman Susan Manuel.

On other business, the Commissioner for Foreign Relations of the European Commission, Sir Christopher Patten, briefed the Council. He told the Council that 360 million euro ($345.6 million) of the 600 million euro ($576 million), which the European Commission has earmarked for the former Yugoslavia and Albania, would be spent in Kosovo. The funds will be used for transport, housing, water and electricity, as well as for the Kosovo budget and the establishment of a functioning civil administration

In a speech marking the occasion, the Principal Deputy Special Representative of the Secretary-General, Mr. Jock Covey, said UNMIK was encouraging women towards decision-making and leadership roles at all levels. The Kosovo Transitional Council has five women members, and the Joint Interim Administrative Structure has three Kosovar and four UNMIK women co-heads of departments. The head of UNMIK, Dr. Bernard Kouchner, has made the appointment of women a priority for the year 2000.

Mr. Covey said policies and programmes are being developed to encourage women in small business development, to provide women with training and skills that match market demand, and to improve women's access to credit, information and know-how on markets.

The review of laws presently under way will ensure that there are guarantees of equal rights and treatment of women and that the law is enforced, he said.

Kosovar women had played a huge role in the parallel system set up after the province's autonomy status was ended in 1989 and were "a great strength" in the recent conflict, Mr. Covey said. Nevertheless, they had been victimized by the conflict in Kosovo and still face barriers that are both subtle and flagrant.

"There are far too few women involved in economic decision-making and peace-making. Inequalities in economic access persist. Customary legal practices deny truly equal treatment of women before the law. And ordinary domestic violence denies women basic human rights and fundamental freedoms," he said.

According to the international peacekeeping force in Kosovo (KFOR) the violence was sparked by two small angry groups of people who were exchanging insults in the Bosnia quarter of northern Mitrovica. A crowd gathered and others joined the dispute on both sides. Shots were then fired and grenades thrown into the crowd.

KFOR reported that those injured included 20 Serbs, 5 Albanians and 16 KFOR French troops and gendarmerie. Ten of the injured have already been released from the hospital.

Later in the afternoon, a rocket was fired into the northernmost of the three apartment buildings in northern Mitrovica to which 38 Albanians, who had fled their homes, were returned on Friday under armed escort. The rocket caused no injuries.

KFOR soldiers have restored order and four men have been arrested in connection with the violence.

The violence broke out as UNMIK begun registering Serb families who wish to return to their homes in Albanian-dominated south side of Mitrovica.

The new arrivals said they fled because of continuing tensions in southern Serbia, near the provincial border with Kosovo, where an estimated 60,000 to 70,000 ethnic Albanians remain, UNHCR said in a statement issued in Geneva today.

A total of 1,658 ethnic Albanians from southern Serbia have registered as internally displaced with UNHCR in Gnjilane since January. But UNHCR believes the number could be much higher because many of the displaced do not register.

There have been increasing reports of instability along the provincial border in recent weeks, including accounts from displaced Albanians of harassment and intimidation by Serb police and military in southern Serbia. At the same time, there are reports of an armed Albanian splinter group operating in the region, UNHCR said.

In another development, UNHCR said it resumed operation of its bus route in the Gnjilane area on Friday and will resume in Pristina today. Altogether, UNHCR operated eight routes around Kosovo aimed at allowing freedom of movement for all ethnic groups. The bus operation was suspended on 2 February following a rocket attack on one of its buses near Mitrovica that killed two Serbs and wounded three others.

Mr. Annan, who was responding to questions on the political future of Kosovo during a press conference at the UN Headquarters, said the support has been "very slow in coming". But he noted that the European Union recently gave 10 million ecus ($9.6 million), after giving 20 million ecus ($19.2 million) before, and was expected to give 35 million ecus ($33.6) shortly.

"That is a good step, but it has to be sustained by all governments," the Secretary-General said.

Mr. Annan said the situation had improved in many parts of Kosovo but conceded, that there were "pockets of problems," noting especially that the need to stem the atrocities committed against minority groups.

His comments followed a joint briefing of the Security Council yesterday by the head of the UN Interim Administration Mission in Kosovo (UNMIK), Dr. Bernard Kouchner, and the commander of the international peacekeeping force in Kosovo (KFOR), General Klaus Reinhardt. Dr. Kouchner told the Council that the United Nations work in Kosovo lacked clear political objectives and sufficient resources.

Mr. Annan said Dr. Kouchner and Gen. Reinhardt were "doing a great job on the ground", adding that UNMIK was operating in a "very ambiguous situation," with no political outline defined for Kosovo, as it had been in Bosnia and Herzegovina.

"If the future political settlement is not clear, it is going to be difficult for us to get these two communities to deal with each other and with us," the Secretary-General said, adding that "we are trying to do our best under very difficult circumstances."

"At the present time, the Serbs from Kosovo need reassurance and the Albanians from Kosovo need to have faith in the future," he said. "However, [Security Council] resolution 1244 on the establishment and objectives of UNMIK doesn't specify the institutional arrangements necessary for the autonomy that it proposes."

To empower UNMIK to progress in its work, Dr. Kouchner proposed the creation of an interim constitution, followed by an interim government which would guarantee the protection of all the province's ethnic groups.

But protection is not enough, he said. "If we hope to build democracy in Kosovo, we must do more than ensure the safety of all its residents. We must allocate the necessary resources to accomplish the job."

Dr. Kouchner said it was "unacceptable" for the UN mission have to beg for the funds that had been pledged to it by the international community, and for the UN not to be able to stick to its promise to the people of Kosovo of ensuring law and order and providing police protection. "If you are not completely behind our efforts, our efforts may fail," he told the Council.

In a press briefing after the Security Council meeting, Dr. Kouchner told journalists that the Council accepted the holding of local elections in Kosovo before the end of the year and the appointment of a person to be in charge of the "very important issue" of missing persons. Dr. Kouchner said that he also asked the Council to visit Kosovo, as they had done in East Timor.

The commander of the international peacekeeping force in Kosovo (KFOR), General Reinhardt, who also briefed the Council today, stressed to the members the urgency of allocating resources to basic services in Kosovo. He pointed out that not only a police force was needed, but also a working and effective judicial system.

"On any given day, two out of three of my soldiers are out conducting security operations," but the attitude of hatred and intolerance that is imbedded cannot be over come by the military alone, he later told journalists.

Earlier in the day, the Deputy Special Representative of the Secretary-General for Humanitarian Affairs in Kosovo, Mr. Dennis McNamara, told a press briefing in New York that the humanitarian programme in Kosovo will be phased out over the coming months. Mr. McNamara said the Secretary-General has accepted a recommendation that the humanitarian component of UNMIK be phased out by mid-2000, as there should not be a need for a prolonged, large-scale humanitarian role after winter.

This will give way to the process of rebuilding and reconstruction, particularly shelter, housing, utilities and social welfare which will provide a safety net for vulnerable families, he said.