New gun battle in Macedonia

Macedonia is still awash with weapons, diplomats say, despite these collected in NATO's "Operation Essential Harvest"

TETOVO, Macedonia -- Ethnic Albanians have fought a fierce gun battle in western Macedonia near where two died in a clash of rival rebel factions last week.

Witnesses told Reuters an unidentified group of gunmen attacked a cafe in the centre of Tetovo early on Thursday with hand-held rocket launchers and heavy machine guns.

The cafe and several vehicles were almost completely destroyed and surrounding buildings were riddled with bullet holes.

A doctor from the Tetovo hospital said they had not admitted any injured from the gunfight but did not rule out that there had been casualties.

Police confirmed the latest incident and said state security forces were not involved.

RESOURCES In-Depth: Macedonia - Hurdles to Peace

Locals told Reuters they suspected the fight was part of a power struggle linked to a deadly clash between rival guerrilla factions in Mala Recica, on the outskirts of Tetovo, on March 25.

Then two gunmen were killed and five bystanders hurt in a shootout between gunmen from the officially disbanded National Liberation Army (NLA) and a splinter group.

The NLA said that it was not involved in Thursday's clash. An official from the Democratic Party of Albanians (DPA) told Reuters that party activists in the cafe were the target of the attack, some of whom were former NLA guerrillas who now work as party security officers.

Locals and other officials from the DPA, Macedonia's main nationalist ethnic Albanian party, told Reuters that they saw the battles as

a struggle for power in the post-conflict ethnic Albanian political arena among former guerrillas and civilian leaders.

The Mala Recica assault targeted an NLA building where several fighters from a breakaway faction were being held.

Diplomats said Western monitors had been sent to assess the scene. They said it showed that Macedonia's peace remained fragile and the country was still awash with weaponry.

"There are a lot of people saying it was a revenge for last week's gun battle, but we cannot say for sure," a diplomat told Reuters.

"People have large amounts of illegal weapons and that by itself presents a danger for peace."

This was the first major violence in central Tetovo since last year's six-month insurgency ended in August with a peace deal which saw NATO mounting "Operation Essential Harvest" to collect rebel weapons.

Tetovo, the main city in the ethnic Albanian region of the country, saw heavy fighting in last year's uprising.

Areas seized by the rebels remain volatile and often lawless as Macedonian police are only gradually returning.

In January after months of delay, the Macedonian parliament overwhelmingly approved a long-disputed law granting broader rights to the ethnic Albanian minority.

The local self-government measures, passed after months of delay, were seen as a crucial factor in trying to bring stability to a country previously riven by ethnic conflict.