Western leaders discuss Macedonia

Up to 100,000 refugees have been displaced

SKOPJE, Macedonia -- Fresh international efforts are being made to resolve the Macedonian crisis.

The United States announced on Saturday the appointment of a special envoy to Macedonia to beef up international efforts to forge a lasting peace.

The U.S. embassy in Skopje said James Pardew would arrive on Sunday to work alongside European Union peace envoy Francois Leotard.

Meanwhile, it has been revealed that British Prime Minister Tony Blair has canvassed the U.S. and France on how their nations could find a political solution to the conflict.

IN-DEPTH Macedonia: Hurdles to peace   •  Balkan hotspots   •  Interactive map   •  Macedonia's military   •  News search   •  Audio/video archive   •  In-Depth: Yugoslavia   •  In-Depth: Kosovo   PROFILE Francois Leotard

Blair's move reflected the growing international involvement in Macedonia where ethnic Albanian rebels are fighting the government in a four-month conflict that has brought fears of civil war and possibly a wider Balkan conflict.

"They discussed how they could further underpin the political process (in Macedonia)," a Blair spokesman said of the prime minister's telephone conversations on Friday with President George W. Bush and President Jacques Chirac.

"A number of ideas were knocked about," he added.

The spokesman played down media reports that Blair had suggested inviting Macedonia's leaders to talks outside the former Yugoslav republic in a "Rambouillet-style" meeting.

The talks at Rambouillet, France, in 1999 were an attempt to gather the parties involved in the Kosovo conflict and halt ethnic cleansing in the Serbian province.

VIDEO CNN's Nick Robertson reports on President Trajkovski's struggle to maintain control in Macedonia (June 26) Play video (QuickTime, Real or Windows Media)

On Friday, NATO formally approved plans to send a 3,000-strong force to Macedonia to help disarm ethnic Albanian rebels, reflecting growing international involvement in Macedonia.

But the force will only be deployed if a lasting political agreement and cease-fire takes hold to resolve the country's crisis.

Macedonian and ethnic Albanian political leaders have been discussing ways to improve minority rights to stem the rebellion, but talks have stalled. There were renewed clashes in the fighting between Macedonian government troops and ethnic Albanian rebels on Saturday.

Macedonian army spokesman Blagoja Markovski told the Associated Press the militants attacked government positions on the slopes of Mount Sara, close to the northern border with Kosovo.

The rebels opened fire from Gajre village, along the Pena River canyon and near the Popova Sapka ski resort, prompting a response from the Macedonian troops, he said.

Gunfire was also heard from inside the rebel-controlled village of Nikustak.

Macedonian and ethnic Albanian political leaders have been discussing ways to improve minority rights to undercut the four-month-old rebellion, but talks have stalled.

The government says the rebels are "terrorists" intent on breaking up the country. The rebels say they are fighting for more rights for ethnic Albanians.

Meanwhile, NATO-led peacekeepers in neighboring Kosovo detained 90 suspected ethnic Albanian rebels from Macedonia in two days, a spokesman for the peacekeeping force said Saturday.

The suspected rebels were all stopped in the U.S.-run sector, close to the border with Macedonia.

Among the 90 were a group of 48 ethnic Albanians detained in one house in eastern Kosovo, close to the border, on suspicion they are rebels fighting Macedonian government forces, said squadron leader Roy Brown, a spokesman for the peacekeepers.

"They are under investigation," Brown said.

In a further development, the government announced on Saturday it is to introduced a war tax to cover a widening budget deficit caused by the worsening security situation in the country, the state MIA news agency.

Macedonian Finance Minister Nikola Gruevski said in an interview on state radio that the government was planning for a budget deficit of $200 million, but warned it could become larger if the conflict spread further.

"Instead of a balanced budget this year we are going to have a $200 million deficit and we will be lucky if that is the only consequence," he said.

MIA said the move, endorsed by parliament, meant that all non-cash transactions by legal entities and individuals would be taxed by 0.5 percent. The amount would be one percent for cash payments.

The tax covers all domestic and foreign legal entities and individuals, as well as non-government organisations.

The tax comes into effect on Sunday and extends to the end of the year. It is expected to add about 2.3 billion denars ($30 million) to the state coffers, MIA said.

Gruevski said Macedonia could also expect a $65 million deficit in its balance of payments and that productivity had slowed.