Four people are reported to have died and at least 20 were injured when the building was hit and set on fire on Friday night.

Duncan Hewitt reports on anger in Beijing

The incident provoked an angry response in China, with demonstrations in taking place in several cities.

Nato Secretary-General, Javier Solana, expressed deep regret over the "tragic mistake".

President Clinton sent his condolences to the government and people of China.

However, Mr Clinton said Nato bombing would continue.

Nato military spokesman Major General Walter Jertz told reporters that the intended target had been Yugoslavia's Federal Directorate for Supply and Procurement.

The BBC's John Simpson: "It's hard to think that such a mistake could ever have been made"

But the alliance gave confusing accounts as to where the target selection process broke down.

Nato insisted its air strikes would continue until Yugoslav President Slobodan Milosevic accepted its demands. The alliance's leadership is due to meet later on Saturday.

Mr Solana said Nato was conducting an urgent inquiry into the incident, which came during the alliance's heaviest bombardment of Belgrade.

Embassies stoned

A statement on Chinese television said Beijing severely condemned a "barbaric attack and a gross violation of Chinese sovereignty".

The BBC's Kevin Connelly: "There is no mistaking the anger"

In Beijing, hundreds of Chinese threw stones at the American and British embassies. Protesters also took to the streets in Shanghai and elsewhere.

The United Nations Security Council expressed shock and concern but did not condemn the attack. The United States said it deeply regretted the incident.

Russian President Boris Yeltsin also condemned the attack, describing it as inhuman.

Ambassador Qin Huasun: "Gross violation to the UN charter"

Correspondents said the strike was almost certain to have diplomatic repercussions because of China's opposition to Nato action against Yugoslavia.

(Click here to see a Belgrade strikes map here to see a map of the raids on Yugoslavia)

Confusion over mistake

Around 30 people were asleep inside the embassy building when it was hit.

Diplomats ran out into the street in a state of shock - some without shoes.

Diplomats ran out into the street in a state of shock

Nato spokesman Jamie Shea said Nato pilots had mistaken the building for a legitimate military target and then hit it with precision-guided weapons.

But Maj-Gen Jertz told reporters at a Nato briefing that the error had been made earlier in the target selection process.

"We had the information that this (procurement) headquarters was in this building," he said.

Jamie Shea: "This was a terrible accident"

"That's why we hit this target, not knowing that it was the embassy."

When pressed, Maj-Gen Jertz said there was no evidence that Nato maps were inaccurate or out of date, neither was there any evidence that Nato intelligence was inaccurate.

Asked if Nato knew where embassies were located in Belgrade, he replied: "Yes, of course we know where the embassies are."

Arkan's Tigers targeted

The Yugoslav news agency Beta said one person was killed when Nato targeted the Hotel Jugoslavja - about 400 metres from the embassy.

The alliance said the hotel was used by paramilitary leader Arkan as a barracks for his Tigers forces and command centre for Kosovo operations.

Nato said other targets during the raids on Friday night included a residence of President Milosevic, which concealed a major underground bunker complex and command centre.

Nato said it also hit two defence ministry buildings, an army general staff building and a number of electrical power transformers.

The state-run Tanjug news agency said Nato jets had used graphite bombs to cripple the power network.

There had been no Nato bombing in Belgrade for the previous three nights.

The raids followed an earlier daylight raid on Nis - Yugoslavia's third-largest city - in which 15 civilians were killed when a hospital and a market place were hit.

Maj-Gen Jertz confirmed that the damage had been caused by Nato cluster bombs, which had missed their intended target - Nis airfield, its aircraft, air defence systems and support vehicles.

He said Nato regretted the loss of civilian life, but the intended targets justified the choice of cluster weapons.

Diplomatic activity

The attacks came against a background of continuing diplomatic efforts by Russia and the West to draw up a peace deal for Kosovo.

The Kosovo Liberation Army rejected a draft plan on Friday, saying it would not agree to disarm.

Yugoslavia has not yet formally responded to the peace plan.

• Analysis: Nato's diplomatic blunder
• Picture gallery: Embassy bombed
• Refugees flood into Albania
• Bombing fuels Chinese hostility
• China condemns strike

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