Govt to consider peace plan as army continues offensive

Army forces are continuing their offensive in Macedonia as the president prepares to discuss his peace offer with leading politicians in the government coalition.

Helicopter gunships pounded northern rebel positions and ground troops fought insurgents at close quarters.

Military officials said the troops used their "entire combat arsenal, including the helicopters", responding to rebel attacks from the northern villages of Matejce and Slupcane.

The two villages appear to be key strongholds of the militants in the area. Macedonian security troops have managed to regain control of few other villages, but the rebels remain dug into several more.

"The situation is very hard, there is street fighting going on in Matejce," interior minister Ljuben Boskovski said.

President Boris Trajkovski has called a meeting of key ethnic Albanian and majority Slav political leaders. He is expected to discuss his offer of amnesty for the rebels if they agree to lay down their arms and end the three-month insurgency.

The meeting will mark the resumption of talks among the country's key politicians, following a government crisis earlier this month that divided them along ethnic lines.

The rebels have not yet publicly reacted to the offer, which would apply only to militants who have not committed major crimes or helped organise assaults.