Macedonia battle rages

NATO troops were standing by to disarm the rebels if the deal was signed

TETOVO, Macedonia (CNN) -- A battle has been raging in Macedonia's second city of Tetovo after nine soldiers were killed in an ambush by ethnic Albanian rebels.

CNN's Juliette Terzieff says tanks, artillery and small arms fire was pounding rebel positions on the west side of the city.

"There is return fire. The battle is going back and forth on this side of the city and it has been increasing over the last two hours," she said.

The battle came as Macedonian Slav and Albanian politicians at Lake Ohrid attempted to put the finishing touches to a peace agreement for the former Yugoslav republic.

"The politicians are trying to figure out exactly what is going on and what that means for their negotiations and their chances of signing a deal which they had hoped to do today," Terzieff said.

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The rebels struck a convoy carrying soldiers about 10 miles west of the capital, Skopje, on the road to Tetovo, which has been near the front lines of fighting.

Fighting continued into the afternoon, with army and police units and vehicles pinned down by rebel fire, a security source told The Associated Press. Government spokesman Antonio Milososki said the "rebel offensive" cut off access to Tetovo.

The ambush -- bringing the highest toll in a single clash since the rebels took up arms six months ago -- came on the main highway between Skopje and Tetevo, the scene of fierce battles over the last five months.

Terzieff reported that helicopters and tanks had been called in and the battle continued. She said there could be more casualties.

The rebels were apparently responding to the killings by Macedonian troops of five alleged rebels in Skopje on Tuesday. The rebels said they were civilians.

Wednesday's toll eclipsed the killings of eight soldiers in a rebel attack near Vejce near the Kosovo border on April 28 as the highest in the conflict so far.

Earlier, observers said leaders of the two main Macedonian and two ethnic Albanian political parties, meeting with Western mediators for the past 10 days in southwestern Macedonia, were tantalisingly close to an agreement.

Macedonia's politicians had entered an 11th day of talks to try to cement an elusive peace deal to end the ethnic Albanian rebellion.

The European Union envoy, Francois Leotard, had said an accord could be just hours away after a senior Macedonian official was quoted as saying demands for a fast rebel disarmament had been dropped.

Macedonian officials had indicated that, if a deal was signed on Wednesday, a formal signing ceremony could be held in Skopje on Friday with NATO Secretary-General George Robertson and European Union foreign policy chief Javier Solana.

After a breakthrough on the two major issues on Sunday a final accord has been delayed by a series of last-minute hitches.

"A number of clarifications have been given and that hopefully will help in reaching an agreement," Max van der Stoel of the Organisation for Security and Cooperation in Europe said of prospects for a deal earlier on Wednesday.

The package, including wider use of the Albanian language, more jobs for ethnic Albanians in the police force and greater recognition of Islam, aims to improve life for ethnic Albanians who make up about 30 percent of the two million population.