KLA attacks intensified, centering on the Drenica valley area with the compound of Adem Jashari being a focal point. Days after Robert Gelbard described the KLA as a terrorist group, Serbian police responded to the KLA attacks in the Likoane area, and pursued some of the KLA to irez, resulting in the deaths of 16 Albanian fighters and four Serbian policemen.
Despite some accusations of summary executions and killings of civilians, condemnations from Western capitals were not as voluble as they would become later. Serb police began to pursue Jashari and his followers in the village of Donje Prekaz. A massive firefight at the Jashari compound led to the massacre of 60 Albanians, of which eighteen were women and ten were under the age of sixteen. This March 5, 1998 event provoked massive condemnation from the western capitals. Madeleine Albright stated that "this crisis is not an internal affair of the FRY".
On March 24, Yugoslav forces surrounded the village of Glodjane and attacked a rebel compound there. Despite superior firepower, the Yugoslav forces failed to destroy the KLA unit which had been their objective. Although there were deaths and severe injuries on the Albanian side, the insurgency in Glodjane was far from stamped out. It was in fact to become one of the strongest centers of resistance in the upcoming war.
The KLA's first goal was thus to merge its Drenica stronghold with their stronghold in Albania proper, and this would shape the first few months of the fighting.
A new Yugoslav government was also formed at this time, led by the Socialist Party of Serbia and the Serbian Radical Party. Ultra-nationalist Radical Party chairman Vojislav eelj became a deputy prime minister. This increased the dissatisfaction with the country's position among Western diplomats and spokespersons.
In early April, Serbia arranged for a referendum on the issue of foreign interference in Kosovo. Serbian voters decisively rejected foreign interference in this crisis. Meanwhile, the KLA claimed much of the area in and around Dean and ran a territory based in the village of Gloane, encompassing its surroundings. So, on May 31, 1998, the Yugoslav army and the Serb Ministry of the Interior police began an operation to clear the border of the KLA. NATO's response to this offensive was mid-June's Operation Determined Falcon, an air show over the Yugoslav borders.
During this time, the Yugoslav President Miloevi reached an arrangement with Boris Yeltsin of Russia to stop offensive operations and prepare for talks with the Albanians, who, through this whole crisis, refused to talk to the Serbian side, but not the Yugoslav. In fact, the only meeting between Miloevi and Ibrahim Rugova happened on 15 May in Belgrade, two days after Richard Holbrooke announced that it would take place. One month later, Holbrooke, after a trip to Belgrade where he threatened Miloevi that if he did not obey, "what's left of your country will implode", he visited the border areas affected by the fighting in early June; there he was famously photographed with the KLA. The publication of these images sent a signal to the KLA, its supporters and sympathisers, and to observers in general, that the U.S. was decisively backing the KLA and the Albanian population in Kosovo.
The Yeltsin agreement included Miloevi's allowing international representatives to set up a mission in Kosovo to monitor the situation there. This was the Kosovo Diplomatic Observer Mission (KDOM) that began operations in early July. The American government welcomed this part of the agreement, but denounced the initiative's call for a mutual cease fire. Rather, the Americans demanded that the Serbian-Yugoslavian side should cease fire "without linkage ... to a cessation in terrorist activities".
All through June and into mid-July, the KLA maintained its advance. KLA surrounded Pe, akovica, and had set up an interim capital in the town of Malievo (north of Orahovac). The KLA troops infiltrated Suva Reka, and the northwest of Pristina. They moved on to the Belacevec coal pits and captured them in late June, threatening energy supplies in the region. Their tactics as usual focused mainly on guerilla and mountain warfare, and harassing and ambushing Yugoslav forces and Serb police patrols.
The tide turned in mid-July when the KLA captured Orahovac. On 17 July 1998, two close-by villages to Orahovac, Retimlije and Opterua, were also captured. Similarly, less systematic events took place in Orahovac and the larger Serb-populated village of Velika Hoa. The Orthodox monastery of Zociste three miles (5 km) from Orehovacfamous for the relics of the Saints Kosmas and Damianos and revered also by local Albanianswas robbed, its monks deported to a KLA prison camp, and, while empty, the monastery church and all its buildings were levelled to the ground by mining. This led to a series of Serb and Yugoslav offensives which would continue into the beginning of August.
A new set of KLA attacks in mid-August triggered Yugoslavian operations in south-central Kosovo south of the Pristina-Pe road. This wound down with the capture of Kleka on August 23 and the discovery of a KLA-run crematorium in which some of their victims were found. The KLA began an offensive on September 1 around Prizren, causing Yugoslavian military activity there. In western Kosovo, around Pe, another offensive caused condemnation as international officials expressed fear that a large column of displaced people would be attacked.
In early mid-September, for the first time, KLA activity was reported in northern Kosovo around Podujevo. Finally, in late September, a determined effort was made to clear the KLA out of the northern and central parts of Kosovo and out of the Drenica valley itself. During this time many threats were made from Western capitals but these were tempered somewhat by the elections in Bosnia, as they did not want Serbian Democrats and Radicals to win. Following the elections, however, the threats intensified once again but a galvanising event was needed. They got it on September 28, when the mutilated corpses of a family were discovered by KDOM outside the village of Gornje Obrinje; the bloody doll from there became the rallying image for the ensuing war.