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In the first sign of possible motion toward meeting NATO’s demands since the bombing of Yugoslavia began nearly seven weeks ago, Serbian leader Slobodan Milosevic on Monday ordered some of his army and police to withdraw from Kosovo.

The announcement was received coolly Monday by NATO leaders in Brussels and by the Clinton administration in Washington. They insisted that the bombing would continue until Yugoslavia met alliance demands for the full withdrawal of its forces from the southern province and the acceptance of an armed peacekeeping force to resettle ethnic Albanian refugees.

Milosevic’s announcement came as President Clinton and other key NATO figures sought to calm Chinese leaders’ anger over the accidental bombing of China’s Embassy in Belgrade on Friday that killed three and injured 20. The bombing was traced to a U.S. intelligence targeting error.

Clinton and his top national security aides issued apologies to China on Monday, even as thousands of angry protesters pelted the U.S. Embassy in Beijing with rocks and burned American flags on the street for the third day. The protests were not as large and violent as those over the weekend, indicating that Chinese authorities were acting to limit the damage, if not to stop it.

The embassy bombing has caused the steepest decline in U.S.-China relations in two decades, coming as the relationship was already strained by charges of Chinese espionage aimed at U.S. nuclear weapons programs and increasing pressure on the Clinton administration to hold China to a higher human-rights standard.

“I apologize. I regret this,” said President Clinton. “But I think it’s very important to remember that this was an isolated, tragic event. . . .”

Despite the U.S. apology, Chinese Foreign Minister Tang Jiazuan on Monday condemned the NATO accident as a “vicious invasion” and demanded an “open and official apology.” He said the United States must thoroughly investigate Friday’s attack, make the results public and “severely punish those responsible.” China also demanded that NATO stop its bombing campaign.

Underlining its anger about the bombing, Beijing also called off disarmament talks with the U.S. aimed at defusing concerns that the Chinese were exporting nuclear and missile technology to a collection of allies in the Middle East, Iraq among them.

The move weakened the foundation on which the Clinton administration’s foreign policy toward China was constructed. Arms control and human-rights negotiations had been cited as evidence that the administration’s China policy was on track.

Clinton has not yet spoken to Chinese President Jiang Zemin, a White House spokesman said, but will do so “whenever President Jiang is ready.”

The embassy bombing also changed and immensely complicated NATO’s mission in Yugoslavia. China had opposed NATO’s bombing campaign from the beginning and holds a Security Council seat in the United Nations, the body likely to approve any resolution of the Kosovo conflict.

Despite the fallout from the embassy bombing, Russia did not halt its diplomatic efforts to negotiate an end to the conflict. Russian President Boris Yeltsin’s special envoy to the Balkans, former Premier Viktor Chernomyrdin, arrived in Beijing for talks with Chinese leaders about the Kosovo crisis.

The Russians have been playing a leading role in trying to negotiate a diplomatic solution to the problem.

Chernomyrdin has been shuttling between Moscow, Belgrade and European capitals for the past three weeks, bringing reports of potential diplomatic advances and suggesting options that Belgrade might accept to settle the conflict. He was instrumental in getting Russia to endorse a proposed peace plan cobbled together by the G-8 industrial nations last week.

Central to that proposal is a planned UN resolution that would require Belgrade to remove its forces from Kosovo, end all violence, allow some 700,000 Kosovo refugees to return and establish a protectorate for them guarded by an international military force.

But the Security Council would have to address all the details in such a resolution, a negotiation that might prove difficult if China and Russia side strongly with Yugoslavia.

The Yugoslav announcement late Sunday that Milosevic was beginning to withdraw troops from Kosovo will probably put internal and external pressure on NATO to stop its bombing campaign. Strong support already exists in Italy, Greece and Germany for a cessation of the airstrikes, and the move for a peaceful settlement is likely to grow in the wake of the Chinese Embassy bombing.

Some Western analysts believe the Yugoslav president timed his announcement to take the most advantage of the situation.

In Belgrade, however, some political analysts viewed the announcement of a partial withdrawal as a sign that Milosevic was ready to cut his losses by declaring victory in Kosovo and pulling out.

“Obviously, Milosevic wants to find a way out of this crisis. He needs to but he wants to save face publicly without capitulation,” said Bratislav Grubacic, editor of the independent VIP daily news report.

“What Milosevic is desperately trying to do is come out of this without being labeled the loser. I do think he hopes this partial withdrawal of troops will soften the Western alliance, that Italy and Germany will produce pressure on the Americans.”

Predrag Markovic, an analyst at the Belgrade-based Institute of Political Science, interpreted Milosevic’s announcement as the opening bid of an endgame.

“We are now expecting a great period of negotiation about which countries will come to Kosovo and join the United Nations forces,” Markovic said. “Our government will work very hard to keep out U.S. forces, but if they have to accept them, there will be no more Americans in Kosovo than there are in Bosnia.”

Of the 32,000-member NATO-led “stabilization force” in Bosnia-Herzegovina, some 6,200 are American troops.

In Washington, Clinton revived his optimistic outlook toward the NATO air war in the wake of Milosevic’s announcement. He said “any progress” in getting Yugoslav troops out of Kosovo would be helpful, but not helpful enough to end the bombing campaign.

“I think we have to do better, but a little daylight, any little progress is better than it was the day before. We just have to bear down and keep working and we will work it through,” Clinton said. “Until NATO’s conditions are met . . . the military campaign will continue.”

NATO’s demands include an immediate end to violence, the withdrawal of all Yugoslav security forces, the return of all refugees to Kosovo under the protection of an international security force with NATO at its core and self-government for Kosovo under an interim international administration.

“(A partial pullout) is only a half-measure. It is not good enough. But we do welcome the fact that President Milosevic now feels it necessary to offer half-measures,” said British Foreign Secretary Robin Cook.

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Deeply suspicious of Serbia, Albanian Prime Minister Pandeli Majko scoffed at the report of a troop withdrawal and said it was a “publicity stunt” that he did not take seriously.

“Serbs know very well how to play the media game,” Majko told reporters at a Balkan economic conference. “Yesterday more than 10,000 abused people came to Albania and another 10,000 are expected.

“Only NATO can guarantee peace in the jungle created by the paramilitary in Kosovo.”