ROME (AP) _ The United States and its allies crafted a mix of incentives and penalties Wednesday _ including a freeze on Yugoslav and Serbian assets abroad _ to stop Yugoslavia's military crackdown in its mainly Albanian province of Kosovo.

The Contact Group of nations monitoring Yugoslavia is struggling to curb the escalating violence in the province, which threatens to spill over into neighboring Albania. They also fear Greece and Turkey could be drawn into the fighting.

``The current situation is untenable. The risk of an escalating conflict requires immediate action,'' the group said.

They called for a concrete dialogue between Albanian separatists in the province and Yugoslavian officials and outlined a carrot-and-stick package.

Representatives from the group's nations, which include Britain, France, Germany, Italy, Russia and the United States, agreed to freeze Yugoslav and Serbian assets abroad.

Also, over Russia's objections, they called for a freeze on foreign investment in Yugoslavia, whose economy already is seriously suffering, if it resists a dialogue on Kosovo's status, Italian diplomatic sources said.

The proposed investment ban was a narrow one _ it only covered new investments in Serbia by governments. And the assets freeze would have little effect because Yugoslavia is believed already to have emptied out its bank accounts after the issue was raised last month, the sources said.

The sanctions also would be applied only by the Contact Group countries, minus Russia.

One U.S.-proposed sanction was not even raised: banning the Yugoslav team from the World Cup finals in France in June, which France ruled out.

The Contact Group also is holding out the incentive of moving to end Yugoslavia's international isolation if it responds favorably.

About 150 people have been killed in Kosovo since Feb. 28, when Serb security forces cracked down on ethnic Albanian separatists. Serbia is the dominant of two republics remaining in Yugoslavia.

On Wednesday, shots rang out at the funeral for three ethnic Albanians killed this week at Priljep. No injuries were reported.

Later, one ethnic Albanian was shot and killed and five were wounded as they returned to a nearby village from the funeral, according to ethnic Albanians.

Ethnic Albanians outnumber Serbs 9-to-1 in Kosovo, but Serbs consider the area vital to their identity.

Outside the meeting in Rome, 400 Albanian protesters chanted and carried placards reading ``Stop the Serb Butchers'' and ``USA, NATO in Kosovo.''

``We want the Contact Group here to stop the massacre in our country and to intervene urgently,'' said Xhafer Berisha, an Albanian from Kosovo.