Secretary General Kofi Annan said Friday that he intends to start negotiations to determine whether the predominantly Muslim territory of Kosovo should gain independence or remain an autonomous part of Serbia-Montenegro, a remnant of the former Yugoslavia. Annan told reporters in Switzerland that he will appoint a special envoy to help lead the "final status" talks on Kosovo's future.

The move is intended to force major powers to confront the most politically sensitive issue remaining in the region from 1999, when a U.S.-led air war forced Serbian forces out of the predominantly ethnic-Albanian province, which was turned into a U.N. protectorate defended by tens of thousands of U.S., Russian and European troops.

U.S. Undersecretary of State R. Nicholas Burns said that the Bush administration "fully supports" Annan's initiative and intends to "be centrally involved in the negotiations." Burns said that the United States will appoint a special envoy to participate in the talks and that he himself will travel to NATO headquarters next week and then to Kosovo's capital, Pristina, and to Belgrade in Serbia to build support for the final status talks. "I think you'll see a major U.S. diplomatic push over the next couple of months," Burns said.

The U.N. case for talks was outlined in a report distributed to the 15-nation Security Council on Friday by Annan's special envoy, Kai Eide of Norway. Its release sets the stage for contentious debate between Kosovo's pro-independence ethnic Albanians, who make up 90 percent of the population, and the Serbs, who are reluctant to abandon their claim to a province that played a central role in their history.

"Naturally, I cannot say now what the result will be," Annan said. "The question of independence is on the table; the question of autonomy is on the table. We will discuss all that with Belgrade, with Pristina."

The move is likely to generate tension between the United States, which has sympathized with Kosovo's bid for independence, and Russia, a close ally of Serbia. It will also increase pressure on the European Union to pledge to integrate Serbia and Kosovo into Europe if they resolve their long-standing dispute.

"This has the makings of classic conflict," said Ivo Daalder, a Balkans specialist at the Brookings Institution. "The American view is to lean towards independence; the European Union will say, 'Let's figure out a way not to make that decision'; and the Russians on the opposite side saying, 'Over my dead body.' "

The 21-page report states that Kosovo's nascent institutions are plagued by corruption, a weak judiciary and the failure of government officials to equitably enforce the rule of law. The six-year campaign to create a viable multiethnic society in Kosovo is "grim," prompting an exodus by the territory's Serbian minority. Still, the report indicates that Kosovo's political process is "gaining momentum."

"There will not be any good moment for addressing Kosovo's future status," Eide wrote. "It will continue to be a highly sensitive political issue. Nevertheless, an overall assessment leads to the conclusion that the time has come to commence this process."

The Security Council indefinitely put off a decision on Kosovo's status in 1999 because of concerns that it would fuel greater conflict in a region that had been wracked by a decade of civil wars. But officials say that many of the region's trouble spots are now stable, providing an opportunity to resolve the Kosovo crisis.

"I think that the risk of volatility associated with not confronting the issue is a good deal higher than the risk in confronting it," said James F. Dobbins, who served as the Clinton administration's special envoy for Bosnia and Kosovo.