"All efforts to achieve a negotiated, political solution to the Kosovo crisis having failed, no alternative is open but to take military action," Mr Solana said at Nato headquarters in Brussels.

David Sillito reports on Nato's clear message to President Milosevic

His decision to launch military action came after US special envoy Richard Holbrooke admitted that his peace mission to Belgrade had failed, and handed the matter over to Nato.

Nato is set to bomb Serbia within hours unless Yugoslav President Slobodan Milosevic halts military activity in Kosovo and signs up to the peace deal for the province. President Milosevic on Tuesday rejected Mr Holbrooke's attempts to persuade him to do just that.

Yugoslav 'intransigence'

Mr Solana said: "We deeply regret that these efforts did not succeed, due entirely to the intransigence of the (Yugoslav) Government."

The Nato secretary-general said he had instructed his Supreme Commander, General Wesley Clark, to begin air operations against military targets in Yugoslavia. But he did not say when the air strikes would be launched.

Mr Solana said Nato's quarrel was not with the Yugoslav people and that the attacks would be aimed at weakening the Yugoslav army and special police forces.

Listen to Nato Secretary-General Javier Solana's speech

UK Defence Secretary George Robertson said the intention was to launch the first strikes later on Wednesday.

Just hours before Mr Solana ordered military action, Yugoslavia declared a state of emergency, citing an "imminent threat of war, the danger of aggression against Yugoslavia by Nato".

The declaration, read out on state television by Yugoslav Prime Minister Momir Bulatovic, called for massive mobilisation of troops and resources and puts the army on a high state of alert.

US President Bill Clinton threw his political weight behind the threat of Nato strikes, warning: "If Mr Milosevic is not willing to make peace we are willing to limit his ability to make war."

The US Senate voted late on Tuesday to authorise American participation in military action against Yugoslavia, by 58 votes to 41.

The White House said that Mr Clinton consulted by telephone with UK Prime Minister Tony Blair, French President Jacques Chirac and German Chancellor Gerhard Schröder ahead of the strikes.

Russian opposition

However, Russia is maintaining its strong opposition to Nato military action.

Envoy Holbrooke handed over the reins to Nato's Solana

Its Prime Minister, Yevgeny Primakov, had been due to visit Washington on Tuesday, but he cancelled his visit when already in mid-flight and returned home.

Mr Primakov's Defence Minister Igor Sergeyev warned that military action could provoke "a new Vietnam inside Europe".

The BBC's Defence Correspondent, Mark Laity, says Nato will use cruise missiles at first, possibly along with Stealth aircraft. They will be used to hit key air defence targets to make it safer for the conventional manned aircraft that follow, he says.

With Nato strikes looming, the US, the UK and Germany have closed their embassies and advised their nationals to leave immediately.

Belgrade on alert

Defence Analyst Nick Childs: "Nato's preference may be for a night operation."

Military preparations - especially of air defence units - have been continuing in Yugoslavia, and air-raid shelters and bunkers are being prepared for civilians.

A BBC correspondent in Belgrade says that there is no evident panic, but the streets have been quieter than usual and long queues have been building up at petrol stations.

However in Kosovo, thousands of refugees from the latest Serb-led offensive have been trying to flee south into the former Yugoslav republic of Macedonia.

The Macedonians, who have already taken in nearly 20,000 refugees, have closed the border to any more.