"It has left me with no doubt that the positions of the two sides do not contain any common ground.

"I regret to say that the potential of negotiations is exhausted."

Ahtisaari said he would now finalise details of the plan and send it to the 15-member Security Council. 

Nato campaign

Kosovo has been run by the United Nations since a Nato bombing campaign drove out Serb forces in 1999.
 
About 10,000 ethnic Albanians died were killed during the province's 1998-99 war with Serbia, and another one million fled.

Diplomats do not feel that they can put the province's two million Albanians back under the control of Belgrade and fear unrest if the population does not see a solution soon.

Belgrade is hoping that its ally Russia will block approval of the plan. Moscow has already raised objections to giving Kosovo independence but has not said whether it will use its right of veto on the Security Council.

Negotiations

Belgrade wants a new process of negotiations and has accused Ahtisaari of openly supporting Pristina's call for independence.
  
"Serbia appeals for negotiations to continue, but the real ones, not these so-called negotiations," Vojislav Kostunica, the Serbian Prime Minister, said. 
  
It has offered the province "substantial autonomy with international guarantees" instead of independence.

Kosovo Albanians saw no point in further talks, blaming Belgrade for "failing to see the reality."
  
"By rejecting Ahtisaari's proposal, Belgrade is now left alone in this process," Agim Ceku, the Kosovo prime minister, said.
  
Under the plan, the province would remain under international supervision and Nato troops would stay in Kosovo to ensure peace and stability. The province's 100,000-strong Serb minority would get self rule and protection.