By Fatos Bytyci

PRISTINA, Serbia, July 26 (Reuters) - NATO will prevent a self-proclaimed 'volunteer guard' of Serb nationalists from marking the anniversary this week in Kosovo of an epic medieval battle, concerned at the risk of clashes with ethnic Albanians.

Reports that the 'Tsar Lazar Guard' would commemorate the 1389 Battle of Kosovo north of the capital Pristina have stirred tensions among the Albanian majority, already frustrated by diplomatic deadlock over its demand for independence. The commander of NATO's KFOR peace force, which has patrolled Kosovo since 1999, said on Tuesday he was working with Serbian authorities to prevent the Guard's attendance.

"I made it absolutely clear that KFOR will by no means accept any kind of paramilitary structures," German General Roland Kather told public broadcaster Radio-Television Kosovo.

"Should they come in, it should be very clear it is our mission to immediately intervene and we will do so," he said.

Serb sources in Serb-dominated northern Kosovo say dozens of nationalists from Serbia proper have already entered the country's southern province, which has been run by the United Nations since NATO bombs drove out Serb forces eight years ago.

Some were shown on television in camouflage uniform when they left Belgrade a month ago, travelling town-to-town on the 350-km trip south.

Police in Kosovo this weekend arrested two Albanians distributing flyers, purportedly from the shadowy Albanian National Army, saying the Guard would be "met with bullets."

The 16,000-strong KFOR will be on high alert on Thursday, when the Serbian Orthodox Church marks 618 years since Serbia's defeat to the Ottoman Turks, a loss that ushered in 500 years of Ottoman rule and resonated through Serb history.

Late Serb leader Slobodan Milosevic used the battle's 600th anniversary in 1989 to stamp his nationalist credentials on the former Yugoslavia in a speech to hundreds of thousands that foreshadowed the country's bloody collapse in the 1990s.

Ten years later his forces launched a brutal crackdown on an Albanian separatist army, expelling 800,000 civilians in a wave of ethnic cleansing that drew NATO into its first 'humanitarian' war. Independent estimates put the civilian death toll at between 7,500 and 12,000, mostly Albanians.

Moscow has blocked the adoption of a U.N. Security Council resolution that would set Kosovo on the path to statehood.

NATO Secretary-General Jaap de Hoop Scheffer warned on Tuesday of instability if the impasse is not overcome.

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