[See photo caption below]
SKOPJE (Reuters) - Macedonian artillery and helicopters bombarded ethnic Albanian rebels in the village of Matejce on Sunday ahead of fresh talks among government coalition partners aimed at ending the crisis.

``They are using helicopters and tanks. Helicopters hit Matejce and Otlja,'' a rebel commander using the name Shpati told Reuters by telephone.

``There are no civilian casualties for now, but if humanitarian organizations do not come there may be a lot of deaths,'' he said. ``We remain in our positions.''

State news agency MIA said the attack resumed after a relatively quiet night.

The army shelled Matejce, the latest flashpoint in a month-old confrontation, into Saturday evening, but said it did not launch ground attacks for fear of causing civilian casualties.

Both sides said they were confident of eventual victory.

``Success is certain, a lot of patience is needed. Time is working against the terrorists,'' Defense Minister Vlado Buckovski told state radio on Saturday.

He said the guerrillas lacked weapons and were worn down by continued fighting.

Shpati disagreed. ``Time is working against Macedonian soldiers while morale of our soldiers is very high,'' he told Reuters by mobile telephone. ``We have good arms and ammunition.''

The army also targeted the nearby village of Slupcane -- one of a string of rebel-held settlements on the lower slopes of Macedonia's northeastern mountains.

President Boris Trajkovski was to resume talks on Sunday evening with the main parties in Macedonia's ethnically mixed coalition, with the aim of ending the violence which has trapped some 8,000 civilians in the crossfire.

The dialogue is to address the grievances of the country's ethnic Albanian minority who say they face discrimination in all walks of life, including education and employment.

MISSED OPPORTUNITY

The guerrillas say they are fighting to end such discrimination.

But a leading ethnic Albanian politician said that, without the presence of the rebel National Liberation Army (NLA) at the negotiating table, the talks would not end the five-month-old insurrection.

``We can only end the war by negotiating with players in the war, and that includes the NLA,'' Arben Xhaferi, leader of the Democratic Party of Albanians and a key partner in the national unity government, told Reuters.

Xhaferi, a respected moderate, was earlier this week persuaded by European Union (news - web sites) foreign policy chief Javier Solana to set aside a peace pact he signed with the guerrillas which threatened to wreck the coalition.

The pact was condemned by political leaders of the majority Slav community and the West. which has ruled out talks with ''terrorists.''

But Xhaferi maintains it was a missed opportunity for peace.

He said a proposal by Trajkovski for a partial amnesty to persuade guerrillas to lay down their arms was unlikely to impress the insurgents. The guerrillas could easily melt away into the neighboring Albanian-dominated Kosovo.

A continuation of the fighting will raise concerns for the thousands of mainly ethnic Albanian civilians holed up in basements in the rebel-held villages.

The government accuses the NLA of using civilians as human shields and says concern for their welfare has resulted in slow progress on the battlefield.

Ethnic Albanian community leaders say the civilians would rather stay put with dwindling supplies of food and water than face unfriendly Macedonian troops.

The mayor of Lipkovo, where many of the civilians are concentrated, said conditions were deteriorating and he feared an outbreak of disease.

``People do not have enough food and medicines. There is no drinking water and general water supplies are low,'' Hysamedin Halili told Reuters.
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PHOTO CAPTION

Smoke over the Matejce village June 2, 2001 as Macedonian troops continue their offensive against ethnic Albanian rebels. Artillery shelled Matejce and two nearby villages, part of a line of rebel held settlements, 13 miles northeast of the capital Skopje. (Radu Sigheti/Reuters)
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