The Yugoslav Army and Serbian Police launched a major counter-offensive against the Kosovo Liberation Army in mid July, 1998. The offensive was backed by artillery, tanks and air support. The offensive had the goal of driving the KLA away from the positions it gained during the summer offensive. The Yugoslav offensive began with an attack on Orahovac and the recapture of the town by Yugoslav forces, which continued until 4 October. Ten days later, on October 14, the American diplomat Richard Holbrooke and Yugoslav president Slobodan Miloà ¡eviàsigned a ceasefire agreement which resulted in the temporary withdrawal of Yugoslav forces from Kosovo.
In 1996, the Kosovo Liberation Army began attacking the Yugoslav Army and the Serbian Police in Kosovo. Their goal was to either separate the province from the rest of Yugoslavia or to make it part of Albania. In the beginning, the KLA started with hit-and-run attacks. The group quickly gained popularity among young Kosovo Albanians, many of whom favoured a more aggressive approach and rejected the non-violent resistance of Kosovo president Ibrahim Rugova. The organization received a significant boost in 1997, when a civil war in neighbouring Albania led to thousands of weapons being looted from depots of the Albanian Armed Forces. Many of these weapons ended up in the hands of the KLA. The KLA also received substantial funds from its involvement in drug trades. After the VJ and MUP attacked the compound of KLA leader Adem Jashari in March 1998, the popularity of KLA skyrocketed. The attack motivated thousands of Kosovo Albanians to join the KLA, starting the Albanian uprising that eventually erupted in the spring of 1998. In the summer of 1998 the KLA launched a large scale offensive against Yugoslav forces with the goal of capturing territories in Kosovo and expanding their control. The KLA managed to capture somewhere around 40% of Kosovo which triggered a Yugoslav offensive in mid July.
The Kosovo Liberation Army launched a full-scale assault on the town of Orahovac, in southwestern Kosovo on July 17, 1998, which resulted in the KLA capturing the town. Around the same time, 1,000 KLA soldiers attempted to cross the border into Kosovo, but failed. The fight ended with 10 casualties on the KLA side and only 200 militants were able to cross the border, with several others retreating to Albania. After 3 days of intense fighting, Orahovac was liberated by the Yugoslav forces. Around 25 KLA militants were killed during the battle per KLA sources.
On 27 July, Yugoslav forces launched an offensive to retake the village of Lapuà ¡nik, and to open up the Prià ¡tina-Peàmotorway.Later on, Yugoslav authorities launched a six-day military offensive on July 28. The offensive had the goal of capturing key portions of Kosovo from the KLA. During 28-29 July, Yugoslav forces under the command of Slobodan Miloà ¡eviàlaunched an offensive with the goal of retaking the town of Malià ¡evo, which was an important KLA stronghold at the time. The KLA suffered 110 casualties and 10,000 Kosovo Albanians fled the town. On 16 August the last KLA stronghold, the town of Junik was captured by Yugoslav forces, forcing the remaining KLA soldiers to withdraw towards surrounding hills and forests. 6 Yugoslav policemen and soldiers were killed while the KLA suffered 13 losses including several commanders like Bekim Berisha. 12,000 Albanian civilians were displaced and 28 were killed.
On 1 September, Yugoslav forces launched an offensive against KLA strongholds in Prizren. After several days of fighting, they managed to successfully capture several places and KLA strongholds in Prizren. The offensive resulted in a total of 35 casualties on the KLA side. After the offensive in Prizren, Yugoslav forces disarmed Albanian villagers. On 9 September, Yugoslav forces mounted an offensive and captured Prilep, RezniÃÂ, Dashinoc, Gloà ¾ana and Lake RadonjiÃÂ. On 22 September, Yugoslav forces launched offensive in Central Drenica that lasted until 26 September. Yugoslav forces managed to capture Gladno Selo, Gornje and Donje Obrinje and other places.
The Yugoslav offensive was considered a success. It resulted in the recapture of most of the territory in Kosovo, which was previously held by the KLA, including Drenica, and other important KLA strongholds in Malià ¡evo, Junik, Prizren, Orahovac, Suva Reka, etc. The KLA was forced to withdraw from one-third of Kosovo's territory. According to a Human Rights Watch report, over 200 Kosovar villages were destroyed in the conflict. Due to the ceasefire in October, the Yugoslav forces withdrew from most of the areas they recaptured from the KLA allowing the KLA to re-establish control in the Albanian-populated areas that didn't have any Yugoslav military presence.
The KLA suffered hundreds of deaths during the offensive, according to Serbian historian . An official list published by the Humanitarian Law Center recorded the deaths of 367 KLA militants, and 8 others were declared missing between 22 July and 4 October. The German historian Jens Reuter wrote that the KLA had "lost more than 500 soldiers and key strategic positions as well" during the offensive. The offensive caused the near destruction of the KLA. Logos did not estimate the Yugoslav casualties. Another report from the Humanitarian Law Center recorded the deaths of 24 Yugoslav soldiers and policemen during 22 July and 4 October. In an interview for the New York Times, Naim Maloku, a senior KLA officer and former Yugoslav Army officer, said that the Yugoslav forces encountered strong resistance from the KLA in the LikovacâÂÂGornje Obrinje area. He stated that "we took weapons from 47 Serbs".
As of September 1998, there were 2,000 recorded deaths during the conflict, including civilians. The estimates for displaced Kosovo Albanians varied widely, ranging from 100,000 to 150,000, 200,000 and even up to 300,000.