[Macedonia resumed its assault on the village held by ethnic Albanian fighters. Read photo caption below]

SKOPJE (Reuters) - A top Western envoy said on Saturday he was optimistic a cease-fire could be reinstated in Macedonia but there was no sign of a formal announcement after the second day of heavy bombardment of Albanian rebels.
European Union envoy Javier Solana made his second flying peace mission to Skopje in three days to try to end an army assault on a guerrilla-held village that ripped apart an 11-day truce and threatened to spiral into a wider conflict.
Macedonian forces, blatantly defying stern NATO warnings to stop the ``madness,'' continued attacks on Aracinovo as Solana drove past the battered village from the airport to Skopje on Saturday morning and sat down to talks with Albanian leaders.
Mi-24 helicopter gunships swooped in, tanks fired and Katyusha rockets slammed into the village, which the Macedonians have vowed to recapture in a risky bid to seize the upper hand in political negotiations aimed at ending the revolt.
Asked about the message the government was sending with the violence, which was accompanied by a noisy display by one of its four newly acquired warplanes, Solana said: ``It doesn't need to send messages like that. I have a mobile telephone.''
The EU's foreign affairs chief held separate meetings with the leaders of parties across Macedonia's ethnic divide to try to find a way out of the deadlock, which Macedonian leaders blame on unreasonable Albanian political demands.
'REALISTIC POSSIBILITY'
``I really think that a cease-fire is a realistic possibility,'' he said after meeting Albanian politicians.
Western allies fear that Albanians and ethnic Macedonians who have co-existed through months of guerrilla warfare and tensions may be driven irretrievably into hostile camps and that the conflict near the southern border of Kosovo could lead to wider, renewed conflict in the former Yugoslavia.
Solana said talks with President Boris Trajkovski had gone well but he emerged from a joint session with Trajkovski and the more hawkish Prime Minister Ljubco Georgievski with the same optimistic message, but no sign of a deal.
He said the talks would continue but gave no more details, giving the appearance that the process had hit a hitch
Macedonian officials insist their goal is to ``eliminate the terrorists'' in Aracinovo, from which the rebels had threatened to attack the main Belgrade-Athens highway and nearby airport.
Officials said 19 security forces personnel had been hurt in the action so far and that one, a policeman, had died but that their forces had advanced. One guerrilla denied that claim.
'WE ARE HERE'
``They cannot be in the village. We are here,'' the man, who gave his name as Xhemia, said by telephone.
Western diplomats doubt the army has enough effective troops to take the village, suggesting the main objective may be a show of strength to pressure Albanian parties to drop demands for wholesale constitutional changes as part of a peace accord.
Albanians want a constitution giving them a veto on major decisions by the state, a position ethnic Macedonians say amounts to federalization or partition. Albanians account for about one third of Macedonia's two million people.
A diplomatic source said Solana's meetings had yielded hopes the Albanian politicians might give ground if granted international participation in future talks on a deal designed to persuade the rebels to end their four-month insurgency.
``For the Albanians, the most important thing is to have an international presence if talks resume. They are not able to move forward alone,'' the source said.
Macedonian politicians refuse to consider full-scale foreign mediation, accusing the Albanians of seeking international backing for a partition of the tiny Balkan country.
But they have accepted the ``facilitation'' Solana is offering in the form of a permanent EU envoy to be appointed on Monday and other international expert help in future peace talks.
In return, the Albanians may be able to be persuaded to moderate their demands, the source said.
The guerrillas, who say they are fighting only to end discrimination against the minority, responded to the offensive with an attack on a police checkpoint in the village of Vorce, wounding five members of the security forces, officials said. Gunmen fired at a train in the same area, but no one was hurt.
Fearing more violence, more than 3,000 Albanians crossed from Macedonia into Kosovo on Saturday, the Kosovo Red Cross said. Some 50,000 have crossed since fighting began in February and many others have left their homes.
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PHOTO CAPTION

Thick smoke rises from a house which was hit by an artillery shell in the village of Aracinovo June 23, 2001. Macedonia resumed its assault on the village held by ethnic Albanian fighters despite a blunt NATO warning to stop and the arrival of a top Western envoy hoping to revive peace talks. (Peter Andrews/Reuters)
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