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The United Nations mission in Kosovo (UNMIK), trying to stem the exodus of Serbs under attack from ethnic Albanians, has proposed beefing up security in areas that are turning into Serb ghettos and enclaves.
The offer falls far short of Serb demands that the UN create five separate "cantons" that would cover 30 per cent of Kosovo's territory with their own administration supervised by UNMIK.
But aid workers acknowledged that the UN counter-proposal would effectively create zones or safe areas for Serbs and erode the principles of a multi-ethnic Kosovo that the UN and the Nato-led Kosovo force (Kfor) have repeatedly stated they are working to uphold.
The offer was put by the office of Bernard Kouchner, the UN-appointed administrator, to advisers to Serbian Orthodox Archbishop Artemije in Pristina on Thursday night. An UNMIK official said the Serb side agreed to "modify" its cantonisation plan.
Since the entry of Nato troops in June, about 150,000 Serbs and gypsies have fled Kosovo, while half a million ethnic Albanian refugees and Kosovo Liberation Army rebels have poured back.
Killings of Serbs, attacks, abductions and house-burning by ethnic Albanians mean that only about 50,000 non-Albanians are left in Kosovo, according to UN estimates.
The violence has under mined Nato's credibility and given Slobodan Milosevic, Yugoslav president, a powerful propaganda tool against his domestic opposition, which he accuses of being lackeys of US imperialism.
Mr Kouchner's compromise offer follows heated discussion within the UN and Kfor about the possibility of regrouping scattered Serbs for their own protection.
But under pressure from Washington, UNMIK shied away from organised regrouping, though it is still a contingency plan if the situation worsens.
The UN refugee agency has already evacuated 400 Serbs from what it calls "life threatening situations" but is opposed to cantonisation.
"The principle of a multi-ethnic society is still worth working for," said spokesman Ron Redmond. "The whole UN is based on this."
However, some Serbs are taking matters into their own hands. About 2,000 are holed up in part of the southern town of Orahovac. Dutch armoured personnel carriers guard the openings of narrow lanes and agencies deliver food. Only a few Serb women dare venture out.
"It's basically a ghetto," Mr Redmond said. Most Serbs there want to leave but Kfor refuses to help them, believing that war criminals are among them.
In the eastern sector under US control, Serbs are leaving villages where they form a minority to seek safety in numbers. Kfor troops have escorted them. Several thousand Serbs also have gathered in a part of Mitrovica after driving 8,000 ethnic Albanians across the River Ibar that cuts the northern mining town in two.
The UNMIK official said the plan was to increase Kfor and international police protection in zones around Orahovac, Kosovo Polje in central Kosovo and US-patrolled Gnjilane where there are concentrations of Serbs. Any Serbs coming back to Kosovo would be directed by the UN to these areas for temporary protection, the official said. Serbs still in Albanian-dominated areas would not be encouraged to move there but UNMIK recognised that the security plan would probably draw them in.
Momcilo Trajkovic, a Kosovo Serb leader, on Thursday assured Geoff Hoon, a UK minister visiting Pristina, that Serb cantons would remain for five years "until there is enough trust for a multi-ethnic Kosovo".