They call it the "Milosevic factor". Doubt about what is going on in the mind of the Yugoslav president is one of the main reasons why few Western envoys are willing to predict, even now, how the Kosovo crisis will evolve. On the face of it, there is an obvious solution to the seven months of fighting in this southern Yugoslav province: Kosovo's ethnic Albanian majority would probably agree - at least for a period - to drop demands for a breakaway state in return for some form of self-government and an end to police repression. And local Serbs, living virtually in ghettoes, might well accept Albanians sharing equal rights in return for a more normal way of life.
Such a deal would make it simple to bow to NATO's current demands: withdrawal of Yugoslav troops, permission for aid to be brought in, refugee return and the beginnings of peace talks. The outlines of a peace deal were drawn up several months ago and await approval by both sides.
But then there is Mr Milosevic. In 1989, Mr Slobodan Milosevic, an obscure apparatchik in a disintegrating communist system, shot to power by calling on Serbs to unite against Kosovo's Albanians who were demanding a separate state.
The province has been used then and now as his political football, and he has kept a permanent crisis going to help distract Yugoslavians from the chaos and corruption of his rule, which has brought the economy to its knees.
Kosovo, the historic Serbian heartland whose modern 1.8 million population is 90 per cent ethnic Albanian, has always been woven into the fabric of Mr Milosevic's career.
In the 1980s, as he rode to the top wrapped in a flag of euphoric nationalism, he told Serbs: "What we're discussing here [Kosovo] is no longer politics . . . it's a question of homeland."
Now the Kosovo crisis threatens Yugoslavia with NATO air strikes unless Belgrade restores the southern province's autonomy.
The US envoy, Mr Richard Holbrooke, who is spearheading Western diplomatic efforts to reach a peaceful solution in Kosovo, is an old antagonist of Mr Milosevic from the 1995 peace process in Bosnia. In a memoir, he wrote of his first meeting with the Yugoslav leader: "He was smart, charming and evasive . . . But despite his cleverness, Milosevic was playing word games devoid of substance - and he knew it."
Mr Milosevic is not the first world leader to use wars and unrest to rally support at home, but this form of brinkmanship is a dangerous game.
The fighting in Kosovo threatened to create an army of refugees and a conflict that could spread across the Balkans. In turn this has brought Mr Milosevic face to face with NATO, which has told him, in essence, to make peace in the province or face crippling air strikes. Making peace in Kosovo, however, is a tricky but not impossible task which would rob his regime of its favourite distraction.
Diplomats in Belgrade say it is Mr Milosevic's complex agenda that is the main reason for peace talks continually stalling. Some think he would even welcome air strikes because it would further rally Serb opinion behind him. However, he may find himself outflanked by nationalists in his own government, including the ultra-nationalist deputy prime minister, Mr Vojislav Seselj.
The latter is likely to react angrily against Mr Milosevic should air strikes succeed in destroying large portions of the Yugoslav army, with the president blamed for not being smart enough to use diplomacy to good effect.
Meanwhile, behind the scenes, another United States envoy, Mr Chris Hill, has been fleshing out a peace plan originally proposed many months ago. The guts of this plan are a bargain in which Kosovo's ethnic Albanians would drop demands for independence in return for having autonomous status within Yugoslavia for three years.
Yugoslav troops would be limited to patrolling only on a six-mile wide border strip. And the police, blamed for repression that has cost the lives of several hundred ethnic Albanians, would be radically restructured.
A new force of 2,500 officers under UN supervision would be created to reflect Kosovo's nine-to-one ethnic balance between Albanians and Serbs. Both ethnic communities seem likely to accept this plan, if only because it is temporary and because it would end the fighting.
Convincing the Yugoslav president will be another matter, but Western diplomats still believed yesterday that in the end he would bow before NATO firepower. "Milosevic is a master of brinkmanship," said one. "He always waits until the last moment."