In this story:

• Proposal offers self-rule
• Bob Dole to join rights monitoring team
• Fighting continues
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WASHINGTON (CNN) -- With colder weather expected within weeks in Kosovo, U.S. envoy Chris Hill warned of a "humanitarian nightmare" unless ethnic Albanian refugees hiding from Serb forces in forests and mountains can safely return home.

Aid workers say diplomats need to work out a deal between Yugoslav leader Slobodan Milosevic and Kosovo's ethnic Albanian leaders by the middle of October, or colder temperatures will start to take their toll.

More than 230,000 people have been displaced by the fighting, and about 50,000 of them are camped in woods and fields in appalling conditions.

"We can't leave them out and leave them to starve or freeze to death," said Hill, who has won agreement in principle from both sides on a formula for an "interim" settlement. He said there's "a long way to go" before it can be put into practice.

Under the proposal, Milosevic would grant Kosovo self-rule -- rather than the independence some of its leaders have sought -- for a period of three to five years, leaving the door open for "final status" negotiations after that time.

Hill said Kosovo is "the worst issue I've seen. Absolutely the worst -- and I've seen Bosnia."

Hill was on the U.S. diplomatic team headed by Richard Holbrooke that brokered the Dayton Accord, which brought an end to the fighting in Bosnia.

The United States is sending human rights teams to Kosovo this weekend. Assistant Secretary of State for Democracy, Human Rights and Labor John Shattuck will be joined in Kosovo on Saturday by former U.S. Sen. Bob Dole.

State Department spokesman James Rubin said Shattuck and Dole "will meet with Serb and Kosovo Albanian leaders and Non- Government Organizations (NGOs), and will visit sites in the Kosovo countryside where alleged human rights violations have occurred."

The two men will leave Pristina Sunday evening for meetings with officials and NGOs in Belgrade on Monday. Shattuck will also travel to Podgorica and the Hague.

Dole, who serves as chairman of the International Commission on Missing Persons, will join Shattuck to corroborate reports of persons missing as a result of the conflict in Kosovo.

At least 500 people have been killed and many more are missing in a seven-month Serb offensive against the Kosovo Liberation Army. Ethnic Albanians make up 90 percent of the population of Serbian-ruled Kosovo province, and the KLA guerrillas are fighting to make the province independent of Serbia.

Kosovo's top ethnic Albanian leader Friday welcomed a tentative, U.S.-mediated formula for ending the crisis and indicated he would try to win over hard-liners to a peace process rather than continue battle for full independence.

"The possibility of an interim and temporary accord is under consideration," Ibrahim Rugova said.

The KLA could be the key to success. Diplomats hope that KLA members will accept the diplomatic process, leaving hard-liners isolated politically within the Albanian community.

Rugova indicated he would take responsibility for building support among the ethnic Albanian community.

Despite those efforts, clashes between Serb forces and ethnic Albanian secessionists continued for a third day in the Orahovac area, 55 kilometers (34 miles), southwest of the provincial capital of Pristina.

The Serb Media Center said police Friday arrested 60 suspected members of the KLA. The fighters were rounded up in the Prizren area near the scene of the latest fighting.

Correspondent David Ensor, The Associated Press and Reuters contributed to this report.