THERE IS THE NATO peace plan for Kosovo, and there are the facts on the ground. The plan confirms that the region is to remain under formal Serbian sovereignty even while it will enjoy "substantial autonomy" on an interim basis under U.N. Security Council aegis. But the facts on the ground point a different way. There are to be no Serb military, police or paramilitary forces, with a token exception, to assert Serb sovereignty. Many Serbs who live in Kosovo may flee out of fear that returning ethnic Albanians will have revenge on their minds. Meanwhile, the forces of Kosovan nationalism, led now by the KLA armed insurgency, ask for a state.

The claim for an independent Kosovo is tough for NATO. The KLA, surmounting its earlier reputation for corruption, was on the way to providing the ground component that NATO hesitated to provide for itself. The Kosovars' agony at the hands of Serbs obliterated Western consideration of their contribution to their own dilemma and drew international sympathy. NATO is under humanitarian as well as political pressure to acknowledge the Kosovar plight.

But many fear that to endorse self-determination and its almost certain result, statehood, is to set a precedent for intervention to draw a new map and to further dismember a sovereign state. The argument against statehood maintains that the big Albanian minority in Macedonia might be the first to act on the precedent, followed by others. Kosovar self-determination and statehood, mishandled, could become a recipe for the next Balkan war.

Perceiving these cruel contradictions, NATO has reacted instinctively by fudging and kicking the problem down the road. Nobody wants the alliance to get into a fight with the KLA. But nobody believes the alliance should stand by and permit the KLA to have its way, either. Two particular considerations must be stitched into policy:

Protection for the residual Serb minority in Kosovo must be arranged as part of the larger reconstruction scheme. Attention to that minority's welfare is central to drawing Serbia -- without Slobodan Milosevic -- toward eventual accommodation. And consultation must be carried out with all the Kosovars, not just those with guns. Before the fighting, Kosovars under an elected president, Ibrahim Rugova, created a remarkable parallel administration by way of boycotting Serb-run institutions. With the shooting, the KLA naturally came to the fore. A cease-fire would start to give others an opening.