The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, the Kosovo bombing intensifies. We look at the diplomatic effort to end the fighting and at the refugee crisis it's creating. Plus Phil Ponce examines the 10,000 stock market, and Poet Laureate Robert Pinsky reads some poetry on warfare. We'll have the other news of this Tuesday at the end of the program tonight.

FOCUS - OPERATION ALLIED FORCE

JIM LEHRER: Day seven of the war over Kosovo: NATO bombs and missiles continued to fall on Yugoslav army and police targets as Russian Foreign Minister Primakov tried to intercede. Tom Bearden narrates our summary report.

TOM BEARDEN: NATO's air campaign against Yugoslavia now is being carried out around the clock.

DAVID WILBY, Royal Air Force: The film clips you are about to see are of a recent attack on the large MUP headquarters complex in Pristina. It is a large complex.

TOM BEARDEN: The alliance is desperately trying to halt what it calls an ethnic cleansing campaign being carried out by Serbian paramilitary and special police forces that are burning cities and villages and forcing tens of thousands of people to flee.

DAVID WILBY: The first village is the hamlet of Brestovac, where Serb MUP forces were in the area at the time this photograph was taken. The second village is Dabrido, where elements of a VJ army unit were conducting operations in the area at the time.

TOM BEARDEN: NATO Spokesman Jamie Shea said the Serbs had almost completely destroyed Peck, a city of about 100,000 people.

JAMIE SHEA, NATO Spokesman: This is something that we haven't seen since the forced evacuation of Phnom Penh in Cambodia by the Khmer Rouge in the mid-1970's.

TOM BEARDEN: As the air strikes continued, Russian Prime Minister Yevgeny Primakov met with Yugoslavian President Slobodan Milosevic to seek a political solution.

YVGENY PRIMAKOV, Prime Minister, Russia: [speaking through interpreter] It has the aim of trying to find a political resolution so that this barbaric bombing ends and Yugoslavia has the opportunity to defend its rights by political means.

TOM BEARDEN: After the meeting, Milosevic released a statement that was read by Yugoslav Television. He said he would reduce the number of troops in Kosovo and allow refugees to return, but only if NATO ceased air operations first. He called it a sign of his sincerity in efforts to solve the problems of Kosovo peacefully. This afternoon State Department Spokesman James Rubin said the US categorically rejected Milosevic's offer.

JAMES RUBIN: With respect to the details of what the prime minister received from President Milosevic, let me say that we regard this suggestion as falling far short of what is necessary in order for NATO to stop its air campaign. We have said what is required clearly the proposals put forward by President Milosevic fall far short of what we think is necessary. Our position is clear Milosevic must halt the offensive against the Kosovar Albanians, withdraw his forces and embrace a settlement based on the Rambouillet framework.

TOM BEARDEN: Speaking at a State Department ceremony, President Clinton reiterated NATO 's commitment to the air campaign.

PRESIDENT CLINTON: The allies are united in our outrage over President Milosevic atrocities against innocent people. For a sustained per, he will see that his military will be seriously diminished, key military infrastructure destroyed, the prospect of international support for Serbia's claim to Kosovo increasingly jeopardized. We must remain steady and determined with the will to see this through.

TOM BEARDEN: While political leaders and diplomats issued statements, the flood of refugees continued. Ethnic Albanians are fleeing by every means possible, trucks, automobiles, even carts pulled by tractors or horses. NATO estimates some 118,000 people have been displaced so far. In Belgrade, morale appears high in spite of the week-long bombing campaign. Some 30,000 people, according to a Serbian TV estimate, turned out at a rally today chanting their defiance.

JIM LEHRER: More on the worsening refugee situation now with two reports, from Alex Thompson and Mark Austin of Independent Television News.

ALEX THOMPSON, ITN: One of the poorest counties in the world, Albania, is now having to cope with an influx of thousands of Kosovar Albanian refugees. It is a modern day great terror, that's how NATO described it. Those refugees lucky to get through this far scramble for whatever food they can get. It's estimated that more than 4,000 Kosovar Albanians are now coming through the border here every hour. The turmoil of those flights of fear is etched on the faces of the most frail. Most refugees can carry little more than what they're wearing. It's reported that at least eight people have died so far in Kukes hospital. This man said, "I'm going to ask for help. I hope I've got a friend in Germany who can pick me up." Albania's generosity has not been overlooked by this mobile community. The arrival of the ex-president, Sali Berisha, brought some cheer. He said, "What Milosevic has done is barbaric."

SALI BERISHA, Former Albanian President: That's the greatest barbary of a region committed by Milosevic, and not only by Milosevic, but also by his criminal administration, his criminal nomenclature.

ALEX THOMPSON: You can see, I think the army, just one or two of the mini buses. But they're using everything they've got. The army's been brought in with its trucks. They're using tractors, anything they've got to hand to transport these thousands of people from the border area down throughout Albania, some of them even as far as the capital, Tirana. And as we traveled up through the mountains today, we saw scores of people simply standing at the roadside, looking in blank amazement as these people come through their towns and villages. It's quite clear that Albania has never witnessed anything quite like this.

MARK AUSTIN, ITN: It is an exodus that seems to have no end. We found them today, edging slowly along the snow-covered mountain pass, taking them from Kosovo to safety. In temperatures well below freezing, they sit huddled in their farm vehicles. Some have only the clothes they're wearing. Others, walking, are carrying what they could salvage before they had to flee. But what they are all bringing across the mountains with them are stories of how the Serb police and paramilitaries are forcing them out.

WOMAN: They come with masks. All this - I don't know -- I can't speak. This is terrible. They are my neighborhoods -- I am with my mother, father, three sisters.

MARK AUSTIN: This family told us another 10,000, mainly women and children, are on the move, also towards Montenegro. Another family who just made it across the border told us the local Serb police warned them to leave, because the much-feared paramilitary leader, Arkan, was operating in the neighborhood. "Everybody knows he's a killer," said the mother, "so everybody is leaving." And this man told me Serb civilians were also burning the homes of ethnic Albanians, neighbor forcing out neighbor.

MAN: In our case, they were neighbors. In our case, in my family, neighbors. We saw them.

MARK AUSTIN: You saw them burning your house?

MAN: We saw them, yes.

MARK AUSTIN: And so Kosovo empties of the people who made up 90 percent of its population.

Well, this is the border between Montenegro and Kosovo. And still, they're coming across. We can't verify the stories they're telling us, because we're not allowed any further. We can't go in with our cameras into Kosovo to find out what's going on. All we can tell you is that thousands are continuing to flee in fear of their lives. These are people with nowhere to go. So today they were finding shelter in a disused factory in the first town inside Montenegro. The problem now is helping them. Food and water supplies have yet to arrive in any significant quantity. The government here is pleading for help from international aid agencies -- the suffering and the frustration even in this place of sanctuary. Despite the hardship, these people say they welcome NATO 's bombing. The Serbs claim that's precisely what they're fleeing from. But all these refugees say they want to return to Kosovo soon, and they're relying on the world's strongest military alliance to make that possible.

FOCUS - TRYING DIPLOMACY

JIM LEHRER: We'll look further at the refugee situation in a few minutes. But first, the diplomacy story, and to Margaret Warner.

MARGARET WARNER: For analysis of and reaction to the day's diplomatic developments, we're joined by Robert Hunter, ambassador to NATO in President Clinton's first term, who is now a senior advisor at RAND, a research organization dealing with political and military affairs; Ivo Daalder, European Affairs Analyst on the National Security Council from 1995 to 1996 - he's now a visiting scholar at the Brookings Institution; and Michael McFaul, an Associate Professor of Political Science at Stanford University and a senior associate at the Carnegie Endowment for International Peace. He's written extensively on Russian foreign policy.

MARGARET WARNER: Bob Hunter, what did you make of Primakov's proposal?

ROBERT HUNTER: I think it is a non-starter. I'm glad we rejected it out of hand because I think it was very important for Mr. Milosevic to know that even with Primakov, one of the architects of the Rambouillet Accords coming there and giving his best shot, we will have none of that. And I think it was useful for Primakov, if he wants to go back. The big problem here is getting across to Milosevic the credibility of what the West is doing and the fact that NATO is going to see this through.

MARGARET WARNER: Non-starter?

IVO DAALDER: Absolutely. There was nothing here.

MARGARET WARNER: Why?

IVO DAALDER: Because none of the even minimal demands that NATO has made are even close to being met -- return of refugees, acceptance of autonomy. There was no word of autonomy in the plan. And everything was predicated on NATO stopping the bombing -

MARGARET WARNER: First.

IVO DAALDER: -- first. First one needs to -- Mr. Milosevic needs to understand that he has to act. The bombing is in response to his actions. The bombing will only stop when he acts. And until he does so, the bombing will continue.

MARGARET WARNER: Do you agree with that, non-starter?

MICHAEL McFAUL: Yes. I don't think it was a proposal. I think it was really Mr. Milosevic's proposal. And Primakov, as a first attempt wanted to make sure that he had the ear of Mr. Milosevic and then he wanted to engage NATO. However, this is just the first foray, let's hope it's just the first foray, and I think we should take seriously bringing in the Russians should, in fact, we want a negotiated settlement here. We still are -- the official policy of the United States and NATO is still to reach a settlement. There may be some doubt about that as of today, but, if it is, the Russians can be an ally in that regard.

MARGARET WARNER: So, you don't think that Primakov really thought that NATO would immediately welcome this with open arms or even invite further negotiations?

MICHAEL McFAUL: No, don't think so. First of all, had he thought that, he would have had a press conference on TV with Mr. Milosevic. He did not do that. He went to Bonn for private consultations. He didn't go to Brussels; he did not go to Washington. And, secondly, you have to realize that Mr. Primakov is doing this as much for domestic political reasons in Russia as he is for finding a peace settlement. What is striking in Russia -- and I think this is really misunderstood in the West so far, is that anti-Americanism has reached a qualitatively new stage. Before this, it was an elite affair. The elite were all against NATO expansion and Western aggression in Europe -- quote unquote. Today the youth is involved and now it's a popular cause and Mr. Primakov is a politician first and foremost.

MARGARET WARNER: Do you share the view that even though this was, in your view a non-starter, this particular proposal, that the United States should be working with the Russians in trying to find a negotiated solution?

ROBERT HUNTER: I suspect in the end when - I don't say "if" -- but when Milosevic has to back down, it is going to be easier for him to do it with the Russians than to come directly to NATO. But it was absolutely critical that this be rejected out of hand. And for Primakov, if he does go back again, to be able to demonstrate we tried that one on -- it didn't work -- next time you have to get serious -- maybe this won't work. The thing that is going to work is the NATO military activity. At the end, maybe the Russians can play a constructive part. One thing they need do as well is to start getting on the right side of history -- to get rid of this loser, Milosevic. And if he does deliver Primakov, this could help Russia find its way into a central role in European security. That's to the good but Primakov has to see his way as does Milosevic.

MARGARET WARNER: All right. But let's go back today to this offer, which, of course, not only the United States but the German Government summarily rejected - yet, people in Europe and the United States are seeing these floods of refugees. Do you think this offer will have any impact within the alliance among some of the allies who are a little less enthusiastic about continuing the bombing campaign?

ROBERT HUNTER: I think this will help with NATO cohesion because it was so contemptible. The idea of being able to go back to last week -- what are they going to do resurrect the people that he has already killed and say, in effect, let bygones be bygones? I think this really showed Milosevic for a man -- I'm sorry to say on television -- but a man of evil.

MARGARET WARNER: Do you agree that it's not going to have any impact within the alliance?

IVO DAALDER: No, I think Bob is right. I mean, this has strengthened NATO's resolve here. After all, Mr. Primakov tried to go the extra mile and he basically got rejected out of hand. He went to Milosevic and said what about a UN force to enforce a peace agreement; what about an OSCE, an Organization for Security and Cooperation force? What about the Greek proposal that there would be a peacekeeping force consisting also of Yugoslav soldiers also?

MARGARET WARNER: All this in lieu of the Rambouillet idea which was NATO force?

IVO DAALDER: Exactly. And it was rejected by Mr. Milosevic out of hand. I think the fact that Primakov did not make his press conference means that he himself knew that Milosevic was putting an offer on the table that was simply unacceptable.

MARGARET WARNER: All right. So do you think though that the US should be pursuing a negotiated solution here that falls somehow short of what the US has said is its goals or should we waiting for Milosevic to wave the right flag?

IVO DAALDER: Right.

ROBERT HUNTER: I think somewhat beyond what we've set our goals. I think it's time we took the Rambouillet agreement off the table. It gives Milosevic no independence for Kosovo, at least for three years and maybe longer -- the disarming of the KLA, keeping Serb troops in. Right now he believes at any moment he can turn around and say I give up; I accept Rambouillet. I think we should take it off the table, increase the pressure, and also put on the table some of the military instruments that we've been holding back like the possibility of ground forces.

MICHAEL McFAUL: Well, we could do that but then we will have a very difficult relationship with our Russian allies. The Russians are -- want to have a bigger role in the peace negotiations and I think first and foremost they want Russian partnerships in any peacekeeping force. We can forfeit that but then we have a very difficult relationship with Russia, which should be taken very seriously. Mr. Primakov today looks like a bad guy dealing with Mr. Milosevic but let me tell you two years from now, we may look back nostalgically at the day when a guy like Primakov was running that country. Extremist forces in Russia, this is a godsend for them in an election year in Russia. We could be dealing with some characters that look more like Mr. Milosevic than Mr. Primakov.

IVO DAALDER: But we're beyond negotiation at the moment. The kind of reports we are seeing of refugees flowing out of the country at a rate of sixty to eighty thousand a day, meaning that this country will be empty of Kosovar Albanians within two weeks - that's the fact we are facing. There is very little to negotiate. We can't go back to Rambouillet for the very simple fact that the Kosovar Albanians will not accept it. How can they accept living under Serb sovereignty? It's impossible to even contemplate that. We should welcome any effort by Mr. Primakov or anybody else, to try to find a negotiated solution, a solution that brings Mr. Milosevic to his senses, but I think the value here was for Mr. Primakov to see that, in fact, Mr. Milosevic is not a man interested in negotiation; he's interested in ethnic cleansing.

MARGARET WARNER: But when you say negotiated, are you - are you thinking that the NATO allies would give anything, or you're just saying-- or you're saying, in fact, you agree with Bob Hunter, that NATO should now up the ante?

IVO DAALDER: We would give -- stop the bombing, stop threatening which wewill in the future -- putting ground troops in Kosovo in a war-like situation. What we will do and give Mr. Milosevic is stability in Kosovo by our presence. That's what we have to offer. But until he accepts that the kind of behavior he's been engaged now in for the last year, in fact, in the Balkans for the last ten years - that is totally unacceptable - we'll continue to do what we're doing.

MARGARET WARNER: How did you interpret, Bob Hunter, what the President said today - we ran the clip - when he said, "And Milosevic has to realize that the prospect of international support for Serbia's claim to Kosovo is increasingly jeopardized. Now we've always stood behind Kosovo, autonomous, though part of Serbia." How did you interpret those remarks coming from the President?

ROBERT HUNTER: I think he's upping the ante. I think he's recognizing the fact that it would be extremely difficult for these people -- even if they were allowed back in -- to live with a bunch of butchers. It's like asking a bunch of people to go back to Germany and live under the Gestapo or with them in the neighborhood during the Third Reich. That can't happen. I think we're finally waking up to the idea that we can't let Milosevic believe he can pocket certain things like "I get to keep Kosovo no matter what happens." I think we need to hold out that an independent Kosovo is not the worst evil that we were saying last week. The worst evil is what is going on now. Incidentally, I don't agree that what we're doing to the Russians is going to drive them in the lap of the Zhirinovskys or others. If this works - and I think NATO has to make it work for its own credibility of the future of the alliance -- and we do get settlement, at that point, I suspect the Russians will want to play in a future process, including in a peacekeeping force, just as they do today in Bosnia, and are being very effective even during the bombing in Kosovo.

MARGARET WARNER: Is that possible?

MICHAEL McFAUL: Well, it's true, I think Russian diplomats might agree with you. I'm not so sure the Russian students, who have had a sit-in for the last four days at Moscow State University, would agree with you, and that's what worries me most of all; that it's not just the babushkas, the 55-year-old grandmothers, protesting NATO intervention in Serbia. It's now the young people of Russia. The only way we can bring them back is to bring in Mr. Primakov - to bring in the Russians. As you say, I think at the end, don't get me wrong, not now, but they need to be part of the process; they need to believe that engaging in the West has a payoff and that they can be part of the international community.

ROBERT HUNTER: If they will engage in a way that is constructive and it's open to the Russians to be the heroes.

MICHAEL McFAUL: Well, that's right. And, in fact, the lesson Russia has to teach Mr. Milosevic and Kosovo is I think very appropriate right now. After all, let's remember the Russians went into Chechnya, using force for precisely the same reason and the result of that force was an independent Chechnya. Had they done something else before, Chechnya might be part of Russia. They have a lesson that they might share with their Slavic brothers.

MARGARET WARNER: How much do you think consideration of the US-Russia relationship and Russia's internal domestic situation should figure into alliance calculations on how to resolve the Kosovo?

IVO DAALDER: The relationship with Russia is important, but I think we're at a critical moment here. We basically have gone to war against Mr. Milosevic. We cannot afford to lose that war. And losing the war would mean that Kosovo is empty and we would stand and let that happen. If it is necessary to win the war by putting in ground troops, we will put in ground troops, because that is how you win the war in the end. That is what is a stake here -- the very future of the NATO alliance is at stake in my view. If NATO fails in its mission here, what good is NATO going to be for, if it cannot do Kosovo? What can it do in the future? The credibility of the United States in a very real sense is on the table here. The President said there is a moral imperative to protect the Kosovar Albanians, who put their faith in our hands. He was right. But that means that the moral imperative cannot stop at air power. It cannot mean that the only way we're going to protect them is in Macedonia, Montenegro or Albania. It means that they have to live in a Kosovo in which they can feel secure, in which their houses are not burned down, and which they don't have to fear masked men knocking on their doors.

MARGARET WARNER: Do you agree with that, that ultimately ground forces might be needed either to protect the Kosovars that are left, or to help Kosovars return?

ROBERT HUNTER: Ground forces are going to be needed.

MARGARET WARNER: You're talking now about inserted not as just peacekeepers.

ROBERT HUNTER: Well, one way or another, there are going to be ground forces there. That was the Rambouillet proposal - there are 28,000 NATO forces getting ready for that. The question is whether they have to fight their way in. I think, frankly, the more ready we are to do this kind of thing, the sooner it is that Milosevic is going to get the message. You see, it's a matter of building support within the alliance. It took a long time, took nearly a year before the air campaign started. But the 19 allies are absolutely unified. If we start building now to the prospect of putting in ground forces, then I think NATO's credibility will go up and Milosevic will finally begin to realize he is up against something real.

IVO DAALDER: But let's be -- I agree -- but let's be prepared this time that if he doesn't believe that he is up against something real that we're prepared to follow through; that is if we build up ground forces there, we have got to be prepared for a war.

ROBERT HUNTER: Let's not threaten anything we're not prepared to do.

IVO DAALDER: Exactly. And part of the problem is with the air power and air campaign we've seen in the last couple of days, that what our credibility has been undermined by the fact that we have said no to ground forces, thereby making it clear to Mr. Milosevic that there was a limit to what we were willing to do. That limit needs to be taken off the table.

ROBERT HUNTER: We have to take it off certainly for bargaining purposes, resolve purposes. But if the air campaign goes on and Milosevic sees NATO is serious, at some point he has got to realize he is losing one of the instruments that keeps him in power.

MARGARET WARNER: All right. Well, thank you gentlemen very much.

IVO DAALDER: Thank you.

FOCUS - GREAT TERROR

JIM LEHRER: And now back to the refugee part of the crisis. Kwame Holman begins.

KWAME HOLMAN: Tens of thousands of Kosovar refugees have scattered South and West in search of shelter in neighboring Macedonia, Albania, a Bosnia, as well as in the neutral Yugoslav Republic of Montenegro. Today in Brussels, NATO Spokesman Jamie Shea tallied the estimates of displaced people.

JAMIE SHEA, NATO Spokesman: Yesterday we had a figure of 35,000 people who had fled Kosovo since March the 24th. But this morning we have a new figure of 118,000. This represents an enormous increase in just a few days, and the numbers are increasing all of the time.

KWAME HOLMAN: And the higher estimates do not include refugees who fled in the weeks and months before the air strikes began. The UN High Commission for Refugees now estimates Albania alone may have more than 100,000 refugees within its borders. And the number could rise to 150,000 very soon. The Former Yugoslav Republic of Macedonia has received more than 22,000. Even tiny Montenegro has taken in more than 40,000 refugees fleeing Kosovo. Thousands more have reached Bosnia as well. US and European officials warn the stage is set for a humanitarian catastrophe. These were among the poorest countries in Europe even before the refugees started to pour in.

PETRO KOCE, Interior Minister, Albania: The situation is very grave, and we need emergency international support. So I think it's now quite impossible for us to handle the situation.

KWAME HOLMAN: At the United Nations, Secretary-General Kofi Annan condemned Serbia for its actions and promised UN relief for the refugees.

KOFI ANNAN: I have designated the high commissioner for refugees as a lead agency to coordinate all United Nations relief activities in the region. I appeal to all of Kosovo's neighbors to give shelter and comfort to the helpless civilians who have been driven from their homes. Borders must be kept open. Safety and protection must be given to those in need. I call upon the international community to give immediate financial, material and logistical support to the authorities in all countries where the refugees are arriving; particularly in Albania, in the former Yugoslav Republic of Macedonia and in Montenegro. Any solution to the conflict must allow these unfortunate people to return eventually to their homes in full security and dignity.

KWAME HOLMAN: This part of Europe was dominated by the Turkish Ottoman Empire through much of its early history and by communist rule in much of the 20th century. Only recently have these countries embarked on democratic government. Macedonia and Bosnia broke from Yugoslavia within the last ten years. Montenegro, along with Serbia, is all that remains of the Yugoslav Federation. The ethnic and political differences that helped bring about the dissolution of Yugoslavia now divide the lands swamped by refugees. While Albania is populated almost exclusively by ethnic Albanian Muslims, Macedonia and Montenegro have a strong mix of Albanians and Serbs, Muslims and Orthodox Christians. Bosnia is unique in that it still is trying to recover from the loss of more than a million refugees during its recent war. Few of them have returned to their original homes and villages. Meanwhile, the minority Serbian populations in those countries have staged sometimes violent demonstrations to show solidarity with Belgrade against the NATO air campaign.

JIM LEHRER: And to Elizabeth Farnsworth in San Francisco.

ELIZABETH FARNSWORTH: Three perspectives now on the refugee crisis in the Balkans. Ljubica Acevska is Macedonia's Ambassador to the United States. Karen Abuzayd is head of the United States Regional Office for the United Nations High Commissioner for Refugees. And Bob Turner heads up the International Rescue Committee's Kosovo Operation. Bob Turner, you returned today from Kosovo and Macedonia. What can you add to the reports we've heard already in the program today about the refugee situation?

BOB TURNER: I spoke to our staff just before coming over. They had been out at the Macedonian border with Kosovo today. Not a lot of people got across today but there was apparently a three kilometer queue. The border was open but the processing of people through the border was taking a tremendous amount of time, so not a lot of people were allowed to get through. But the stories coming out of Kosovo from the urban areas from Metrovize, from Prodevo, from Pristina are very dire.

ELIZABETH FARNSWORTH: Mr. Turner, you have been watching this gather force from your position inside Kosovo for a year. Put it in context for us. What do you think -- from what you see, what is the strategy? Does Milosevic want to get rid of all the Kosovo Albanians that are in Kosovo?

BOB TURNER: It almost looks that way now. The history of the conflict has been that it has been rural up until the last week really. The bulk of the fighting, the displacement, the torching of villages was all rural. It's only since OSCE left, since the international community left last week that it has gone urban. And this now has more of a parallel to Bosnia than the conflict did before the last week.

ELIZABETH FARNSWORTH: And Mr. Turner, what has happened to the Kosovar Albanians that worked with you, with your group? There have been reports that people who worked as translators, for example, or in other capacities with the international monitors have been targeted.

BOB TURNER: That's correct. We don't, unfortunately, have a lot of information on our staff. We have been trying to contact people systematically, get through by phone or through contacts try to find out how they are. Of 100 local staff, we can only count for 10 to 15. And we are obviously very concerned about the fate of the rest.

ELIZABETH FARNSWORTH: Karen Abuzayd, we just heard from Kofi Annan, the UN High Commission. It's the lead operation of the rescue operation on this. What can you add to this picture?

KAREN ABUZAYD: Well, I can add that our really main concern is that we have been planning for about 100,000 persons to come out of Kosovo particularly into Albania and Macedonia. And now today we've revised those estimates upwards to our, I guess, worst case scenario to about 350,000. So we have a lot of work to do to meet that -- the difference between 100,000 and 350,000.

ELIZABETH FARNSWORTH: Describe that work. What are you doing?

KAREN ABUZAYD: What we are doing now is getting together the donors, getting together the agencies who are with us out there in Macedonia and Albania, trying to find out who can provide what, where are the gaps, make sure there is no duplication and just get things moving as fast as possible, because, as we've heard throughout the program, there is a terrible need for shelter; there's a big need for transport once we have the goods to move. Roads in Albania particularly are terrible. The logistics of this situation are going to be quite daunting.

ELIZABETH FARNSWORTH: And, for the record, there is no sign that this is abating, that it is letting up, right?

KAREN ABUZAYD: That's what we're saying. And, as far as we can see, people are coming out in large numbers.

ELIZABETH FARNSWORTH: And, Ms. Abuzayd, do you have any information about the men and boys who, according to some reports, have been removed from the groups of refugees? They've allowed women and children to go on but that men and boys were removed. Do you have reports on where they might be?

KAREN ABUZAYD: No and that's something that worries us. We can certainly confirm that what is coming out are mostly women and children. So where are the men? What are they doing? It's a question that needs to be answered.

ELIZABETH FARNSWORTH: There have been reports, for example, of prisoners in a soccer stadium in Pristina. Do you have any information about that?

KAREN ABUZAYD: We have no information from inside. We are unable to contact our local staff, as well, inside.

ELIZABETH FARNSWORTH: And the High Commission has called on the countries that we've been hearing about, Macedonia and Albania, for example, to keep the borders open. Are the borders open to refugees at this time?

KAREN ABUZAYD: I would say these countries are behaving fantastically well, amazingly well for the kinds of conditions they're in, particularly poor Albania receiving 80,000 to 100,000 people over the last several days. They've said we can accept 20,000 - we said, please accept 50,000 - now we're into 100,000 and they are still coming, so something as to be done to move them forward. As we heard, the border in Macedonia, people are moving quite slowly through it - we think it's partly because people are -- the Customs officials and so on are just getting very tired.

ELIZABETH FARNSWORTH: Madam Ambassador, is that the case? What can you tell us about that border post in Macedonia where people have had to slow down?

LJUBICA ACEVSKA: Well, you know, the Republic of Macedonia from the beginning has welcomed the refugees. We are trying to be as helpful to the refugees coming into Macedonia as possible. You know, we are trying to process the documents, and we are trying to be as helpful as possible, but there are a lot of large numbers coming into the country, and that is why the process is taking a long time.

ELIZABETH FARNSWORTH: There were reports, wire reports, that the National Security Council of Macedonia said that the country could take only 20,000 and no more. is that the case?

LJUBICA ACEVSKA: well, you know, for 20,000 we can provide, even though that is difficult, we can still provide for them comfortably, but we have already surpassed the 20,000. You know, last Thursday, our foreign minister sent letters to his colleagues asking for assistance, and thus far, you know, unfortunately, we have not received much assistance to help us with the refugees. We have state we cannot - we don't have the capacity and we are asking for as much help as possible. And as Ms. Abuzayd said, you know, we are doing everything that we can. We will continue to do everything that we can, but it is very important for the international community to be forthcoming immediately with help to provide the people.

ELIZABETH FARNSWORTH: So Madam Ambassador, there could come a point where you have to close the borders -- you just can't take anybody else?

LJUBICA ACEVSKA: No, I don't think we will ever close the borders because again from the humanitarian aspects, we'll try to help the people. But, you know, it is becoming a great burden, and it is -- it is very hard. But we will never close the borders. We'll try to be as helpful as possible. And again we are reiterating our call for help from the international community.

ELIZABETH FARNSWORTH: And Bob Turner, you have been in Macedonia. You've seen how the refugees are being taken care of. What are you seeing?

BOB TURNER: To date, I think the refugees have been treated very well in Macedonia. The system that is being utilized is a host family system. Refugees come across, they are registered with the police as humanitarian assistance cases. They receive assistance primarily through the Macedonian Red Cross with assistance from the Federation of Red Cross and then they are placed with a family. And to date, I think they've been treated very well. The issue obviously is how many refugees can Macedonia take.

ELIZABETH FARNSWORTH: And Karen Abuzayd, what about Albania? This is one of the poorest countries in Europe. What is happening to the refugees who go there? Where are they staying?

KAREN ABUZAYD: Well, believe it or not, many of them are also being hosted by Albanian families. As I say, the people are going up with their cars, trucks, their buses, their tractors and taking people back to their homes. We - we're estimating that the people have come in, about half of them have been moved onwards, mainly by local Albanians and by the Ministry of Defense in Albania. What the government and people of Albania have done is quite a phenomenon, I would say.

ELIZABETH FARNSWORTH: And what about Montenegro, what is happening there?

KAREN ABUZAYD: There, we are just getting our people back in today, so, I don't have the latest information. Our people had been taken out of there as with all our international staff from the former Republic of Yugoslavia -- Federal Republic of Yugoslavia. So what we understand though from Montenegro is that the people are very looked after by the Montenegrin government although it's straining their capacity, too but they've always behaved very well with the refugees; they've always been very cooperative with our agency up until this time, even before this particular crisis.

ELIZABETH FARNSWORTH: Bob Turner, explain the effect of having tens of thousands of Kosovar refugees in Montenegro, which, after all, is part of the Yugoslav Republic with Serbia.

BOB TURNER: It's hard to scale how much impact it's going to have politically on Montenegro. Obviously the situation there is politically somewhat precarious made more so by the air strikes which, I think, are somewhat hard for a pro-western anti-Milosevic government to explain to the people. But I think for the most part, the Montenegrin government has acted well towards the refugees. There was some movement earlier late last year that people were encouraged to carry on from Montenegro to Albania. But it's really hard to gauge. As I say, Montenegro's political situation is difficult, to say the least.

ELIZABETH FARNSWORTH: Because its president has been President Milosevic's key opponent?

BOB TURNER: Correct. But it's also part of the Federal Republic of Yugoslavia. It has the Yugoslav army have bases there, have air defense systems there. So, obviously it's a difficult position for them to be in.

ELIZABETH FARNSWORTH: Ambassador Acevska, are you worried that Macedonia could be attacked because of the refugees coming in, attacked by Serbian troops, Serbian forces, and also because of the NATO troops that are now headquartered in Macedonia?

LJUBICA ACEVSKA: Well, you know, we have asked for guarantees from NATO and also from the United States so that in case anything does happen in Macedonia, that NATO will protect us. We have received the assurances from Mr. Solano and also from the United States. We have received assurances for the territorial integrity of the Republic of Macedonia.

ELIZABETH FARNSWORTH: So this is a real concern?

LJUBICA ACEVSKA: It is a concern to us, certainly. I mean we do live in that neighborhood. We will continue to be in that neighborhood. That's why we have also stated that our territory should not be used for attacks against Yugoslavia. And we have always called for a peaceful solution and political agreement to this crisis.

ELIZABETH FARNSWORTH: And Madam Ambassador, what other consequencescould flow from the presence of so many refugees in Macedonia?

LJUBICA ACEVSKA: Well, you know, in the Republic of Macedonia, we have always had very good interethnic relations. The Albanians have always been part of the government -- members in parliament. But one of the consequences could be that, you know, Macedonia is again relatively a poor country, so economically there might be some resentment why a focus is paid to the refugees and not to the Macedonians. And a lot of the Albanians are taking in the refugees but this could also be a burden to the families, you know, if all of a sudden it is an increase in numbers. So the economic consequences -- and also economically Macedonia is suffering because we are losing the trade, which we had with Yugoslavia. We are losing the transit through Yugoslavia. Already we have calculated we have incurred costs of over $200 million because of the crisis which is going on over there. So it is of great cost to Macedonia.

ELIZABETH FARNSWORTH: And, Ms. Abuzayd, if there are more and more refugees and they can't be absorbed by Montenegro, by Albania and Macedonia, where do they go? What do you do then?

KAREN ABUZAYD: Well, this becomes a big problem and the High Commissioner, as well as the Secretary-General, as you heard, have asked that other countries besides the neighboring countries keep their borders open; treat these people like refugees if they come or if he have to do something like we did during the Bosnian war, grant some kind of temporary protection to them. I mean, if we get 250,000 more refugees, we know there is no place for them, not enough place for them in the neighboring countries. They are going to have to move further on.

ELIZABETH FARNSWORTH: And Ms. Abuzayd, the history in Bosnia has not been great with returning refugees, right? Many of the people who left have not been able to go back. What about here?

KAREN ABUZAYD: That's extremely worrying for us. We are still dealing with the consequences of the Bosnian war in terms of minority returns, that is hundreds of thousands of persons still outside the country are not back in their home villages. And so what does it mean for this same group? Probably much the same because they want to go home. They would rather go home to their places rather than move on further. But it would depend how soon that prospect looks like it might come about.

ELIZABETH FARNSWORTH: Bob Turner, do you have anything to add to the question of going home?

BOB TURNER: Well, I think there is a difference from Bosnia. One enormous caveat - that being that there will be an agreement -- that there will be a NATO ground force to implement to make sure peace is held. The Albanian community has a tremendously strong tie to the land to their homes. And I think that they will go home as quickly as they came out, given the opportunity. We've seen that over and over again throughout the conflict. A village is shelled. The people are forced to flee. They go to the next closest place they feel safe. But at the first opportunity, when they feel confident that it's secure, they return to their homes. I think they'll do the same.

ELIZABETH FARNSWORTH: Well, thank you all three very much for being with us.

NEWS SUMMARY

JIM LEHRER: In the other news of this day, the strong economy has helped Social Security and Medicare financing. Their trustees reported today Medicare funding should last until 2015, seven years longer than previously expected; Social Security until 2034, two years longer than predicted. The Federal Reserve Board left short-term interest rates unchanged. Its Open Market Committee decided to leave the key rate at 4.75 percent. In Portland, Oregon, the largest individual verdict against a cigarette maker was returned. A jury ordered Philip Morris to pay $81 million to the family of a man who died of lung cancer after smoking for 40 years. A day after breaking 10,000, the Dow Jones industrial average backed away from that record high. It was down 94 points closing at 9913.

FOCUS - BREAKING 10,000

JIM LEHRER: Phil Ponce has more on 10,000 and the Dow.

PHIL PONCE: The Dow Jones Industrial Average is the most widely recognized measure of the US Stock market. Twenty years ago today, the Dow closed at 862 points. Since then, it's climbed steadily, with two major interruptions in 1987 and 1998. Yesterday, the Dow made history when it closed over 10,000 for the first time ever. With me now to talk about this new closing benchmark is Gretchen Morgenson. She covers the stock market for the "New York Times."

PHIL PONCE: Gretchen, on the front page of your paper today, the story of this 10,000-point closing -- front page of your papers, on the front page of papers all over the country -- why is it such a big deal, why the level of interest?

GRETCHEN MORGENSON: Because more and more Americans own stock today, Phil. The fact is that 45 percent of households invest in the stock market in some way. And that is up dramatically from a 1980's level of 14 percent. So you see, there are more people involved, more people are committed and more people are interested.

PHIL PONCE: And that's what people mean when they talk about the merger of Wall Street and Main Street?

GRETCHEN MORGENSON: Absolutely. You have a lot more people talking about it in magazines, newspapers, on television shows and it is becoming a way of life for more and more Americans. Of course, with 401[k]'s, in which they have to make their investment decisions themselves, whereas before the retirement plans were really managed by professionals or by someone else. So, it's really an active investment community that involves everyone from, you know, youngsters in high school who are taking stock market courses all the way up to retirees who are watching the market daily.

PHIL PONCE: And, Gretchen, speaking of stock market courses, what exactly is the Dow Jones Industrial Average?

GRETCHEN MORGENSON: The Dow Jones Average is an average of 30 industrial stocks -- names that would you know, everyone knows -- like McDonald's, Wal-Mart, Boeing, a broad mix of stocks. And what the number 10,000 refers to is the conglomeration of all of those stocks' prices, which is then multiplied by a number that is very complicated. I won't go into that, but that's how you get to the 10,000-point level. It reflects the conglomeration of all of those stock prices put together.

PHIL PONCE: And that's why they call it an average -

GRETCHEN MORGENSON: That's right.

PHIL PONCE: -- because it's averaged out by this formula that -- the details of which you are sparing us.

GRETCHEN MORGENSON: Right. Right. You don't need to know. But the good news is that it's going higher, although today we dropped back a little bit. It does reflect, although a lot of people do not own per se the Dow Jones Industrial Average, it does reflect a lot of the big name companies that more and more Americans have been piling into because they have been performing very, very well.

PHIL PONCE: And sticking with the 30 companies, who picks them and why those 30 companies?

GRETCHEN MORGENSON: Well, it's picked by Dow Jones, which is the publisher ofthe "Wall Street Journal" and other publications, and they make the decisions based on what they think reflects the economy, you know, you'll have a certain number of financial companies, a certain number of, you know, heavy industries, a certain number of retailing companies. So they try to reflect a broad mix of the economy in the nation.

PHIL PONCE: And even though the term "industrial" is in the term, they are not necessary industrial. You mentioned Coca-Cola -

GRETCHEN MORGENSON: Correct.

PHIL PONCE: -- McDonald's - Disney; these are not industries like steel industries -

GRETCHEN MORGENSON: They're not the old metal benders that you think of as the industrials, no.

PHIL PONCE: For Wall Street, what does it mean to have hit 10,000?

GRETCHEN MORGENSON: It's very euphoric because it's -- and historic -- because it really reflects the really amazing strength of the US economy. We have had an almost uninterrupted eight and a half years of growth in this country. This is unheard of. Usually we have booms and then we have busts. But this one has been a boom for a very long time. We have had Gross Domestic Product growth, which has been super impressive. And also our economy has been able to withstand tremendous pressures from external events in Asia. Of course the worldwide tremors in economies in Asia, Russia last summer, more recently South America - yet, our economy just perks along. It's like the Energizer Bunny. It just won't stop.

PHIL PONCE: And what is the conventional wisdom about why it won't stop?

GRETCHEN MORGENSON: Well, part of it is that we are a strong economy because we have -- American corporations have become much more efficient than ever before. Technology plays a huge contribution to this because it allows the efficiencies to come into the market, and what that means is that it translates to a lot more money for people to spend, a lot more money for them to invest. And just broad-based good times. And the more people that spend more money, the better the companies do. You also have to take into consideration the interest rate scenario, which has been tremendously helpful to the stock market. As you know, we had a conflagration in some economies last fall and last summer and the Federal Reserve Board responded very quickly by cutting rates three times. And that is extremely favorable on a number of levels. Americans have more money in their pocket because they are spending less to finance their homes. All of this has the effect of really increasing the value of Americans' portfolios.

PHIL PONCE: Gretchen, today the Federal Reserve Board left interest rates where they were, again continuing -- is that a good sign for the levels that the stock market is hitting right now?

GRETCHEN MORGENSON: It's a very good sign. It would have been a bad sign had they tightened or raised rates. No one really expected them to do that. So the fact that there was no movement out of the Fed today was just further confirmation that there really aren't any horror shows on the scenario on the horizon that the Fed is worried about that would make them want to raise rates.

PHIL PONCE: Gretchen, in the past when the Dow Jones has hit a marker like a 1,000 marker, what kind of an impact has that had on the behavior of individual investors or institutional investors? What does it do?

GRETCHEN MORGENSON: It depends which one you're talking about. When it hit 1000 for the first time, which was back in the 60's, I believe, it backed off immediately and took a long, long time for it to get back there, I mean more than ten years, I think. So in that case, it was a high water mark that was not returned to for quite a while. But when you have seen it at other levels, such as say 5000, which was less than four years ago, it just really kept on going. So you can't really make generalizations about what it will do from here. There is, of course, the initial reaction which is, well it's going to go almost -- it's always going to go higher because there is so much euphoria around. But you can't guarantee that, either. It's really a toss up.

PHIL PONCE: And since it just happened yesterday, is it too early to say, or what are some of the well known names on Wall Street predicting is going to happen at this point?

GRETCHEN MORGENSON: Well, some of the more famous bulls on the street who have been right, by the way -

PHIL PONCE: And bulls are people who believe the market is going to go up. Bears think it's going to go down.

GRETCHEN MORGENSON: They are the positive ones. They include Abbey Joseph Cohen at Goldman Sachs, and others believe that the market will go to, I don't know, maybe another 5 percent more this year, which doesn't sound like a lot, but we're already up, I believe 9 percent on the Dow Jones Industrial Average so far this year. So if you were to tack on another 5 percent, that's a quite attractive return on an annualized basis.

PHIL PONCE: And help me with the numbers. What would that get the Dow Jones up to, 5 percent? Someone was saying around 11,500? Is that the range?

GRETCHEN MORGENSON: Well, that brings us up 15 percent from 10,000. So, that's a quite optimistic view. I think looking at maybe 10,500 is more like it.

PHIL PONCE: Gretchen, in the short time that we have left, there is a war going on and conventional wisdom I thought was that the markets do not like instability. Is it having any impact, what is happening in Kosovo?

GRETCHEN MORGENSON: Well, you're right Phil about the uncertainty. That is always a negative for the markets. I've got to believe, however, that the markets simply believe that this war will not spread. If they felt -- if investors felt that this was a true threat that it was really going to expand dramatically and that we would not be able, that NATO would not be able to stop Milosevic in his tracks, that you would see it in the stock market in a negative way.

PHIL PONCE: So at this point are you saying that there is simply not a perception that the nation's economic interests are in jeopardy at this point?

GRETCHEN MORGENSON: That's right. That's right.

PHIL PONCE: Gretchen Morgenson, thank you very much.

GRETCHEN MORGENSON: You're welcome.

FOCUS - OPERATION ALLIED FORCE

JIM LEHRER: And to update that story: This seventh day of the war over Kosovo, NATO bombs and missiles continued to fall on Yugoslav army and Serb police targets as Russian Foreign Minister Primakov interceded with a suggestion for stopping the bombing that was immediately rejected by President Clinton and other NATO leaders. The refugee situation continued to worsen. NATO officials said more than 100,000 ethnic Albanians have crossed into neighboring countries since the allied bombing began. And before we go tonight, some thoughts about warfare from NewsHour regular Robert Pinsky, Poet Laureate of the United States.

FINALLY - HERO IN WARTIME

ROBERT PINSKY: In a time of war, those who fight make some balance in their minds between the cold facts of killing, pain, and destruction on one side and the notion of purpose, or even glory, on the other side. How much spiritual energy goes to the sense of mission, and how much to an awareness that force is a last resort? Presumably, in a democracy, each of us may feel some of that double consideration. Wallace Stevens wrote a poem called "Examination of the Hero in a Time of War," in which Stevens tries to approach that question. What Psalter or prayer book should our sibyls or prophets use? What do the values of civilizations and great cities mean when what seems necessary is force? Here are some lines from the poem's first stanza, suggesting the harsh brutality of warfare as a mission. "Force is my lot and not pink-clustered Roma, Ni Avignon, Ni Leyden; and cold my element. Death is my master. And without light, I dwell. There, the snow hangs heavily on the rocks, brought by a wind that seeks out shelter from snow. Thus, each man spoke in winter. Yet each man spoke of the brightness of arms." And the stanza ends with the other side of the matter, repeating that phrase, "the brightness of arms." "The brightness of arms, the will opposed to cold fate in its cavern, wings subtler than any mercy. These were the Psalters of their sibyls." What I take from that is that the heroic course is keeping your balance. May it be so.

RECAP

JIM LEHRER: We'll see you online and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.