Huge crowds are on the streets of Belgrade, celebrating what appears to be the overthrow of President Milosevic after a day of mass protests.
The new political situation appeared to be confirmed shortly before midnight local time (2200 GMT) when Vojislav Kostunica appeared on state television described as the new president.
In a wide-ranging interview, Kostunica revealed that he hoped sanctions imposed on Yugoslavia could be lifted as early as Monday.
The opposition leader said he had been promised by France that the sanctions against Yugoslavia would be lifted at Monday's meeting of the European Council.
Kostunica also appealed to police to prevent looting, after a day of demonstrations in Belgrade that left his supporters in control of the parliament and key media outlets.
Despite unanimous support for the opposition movement from western leaders, he said Yugoslavia would not forget, "the NATO aggression, but we can't live against the grain" and he said he hoped to be able to restore "normal relations with the world."
Milosevic has not been seen and his whereabouts are unknown. The independent Beta news agency reported that three aircraft took off from a military airport near the Yugoslav capital at 8.20 p.m. local time.
Milosevic'a suburban Belgrade home appears to have been vacated, U.S. intelligence sources monitoring the still developing situation there said late Thursday.
"The house is dark", said an informed official in Washington. "There is no security" around the home as would normally be expected, there are "no cars" and "no movement" at Milosevic's home outside of Belgrade, the official said.
This is counter to published reports that the house is guarded and Milosevic has been known to hide in various secret locations-- as reported during the NATO bombing.
Intelligence officials said they were "encouraged" to have seen "some numbers" of Yugoslav army and special police forces known as "MUP" joining protesters at Thursday's massive rally in Belgrade.
"When that happens (in significant numbers), it's all over", one official said.
U.S. intelligence estimates that the crowd involved in the protest reached 500,000.
U.S. intelligence officials are watching all unusual flights in and out of Serbia for any signs Yugoslav President Slobodan Milosevic may intend to seek refuge in another country.
Opposition leaders admitted they were "stunned" by the scale of the popular demonstration to oust Milosevic on Thursday.
Protesters stormed the Yugoslav parliament building, setting it on fire, smashing windows and throwing out books and portraits of the president.
State television initially reported that hooligans were attempting to take over the parliament. After that, its hourly news bulletins were dropped and then it was knocked off air when protesters set the building ablaze.
It has now been re-opened under a new name - and is broadcasting for the first time pictures of the day's dramatic events in Belgrade to other parts of the country.
The footage shows police using tear gas to try to disperse the demonstrators. Some police, apparently siding with the opposition supporters, allowed some of the crowd into the building.
But CNN's Belgrade bureau chief Alessio Vinci says one of the most surprising aspects of the demonstration was the lack of resistance offered by the security forces.
Very few police were seen at the height of the protest and soldiers were seen shaking hands and smiling with the demonstrators.
The independent Beta news agency reported on Thursday night that the Yugoslav army would stay in its barracks.
It quotes an unnamed military source as saying, "The Yugoslav army will in no way interfere in street events. Yugoslav army members have always stayed aside, respecting their constitutional role."
Earlier opposition leaders said they wanted a statement from the army supporting Kostunica.
None has been forthcoming and opposition leaders are encouraging the demonstrators to spend all night on the streets until Milosevic officially admits defeat.
Vinci said the people are in party mood and appear happy to do that.
"We're seeing hundreds of thousands of people taking to the streets of Belgrade and just celebrating. We've seen them dancing, we've seen them singing, drinking," he said.
"There's really a feeling here that the people this time have won their decade-long struggle against President Milosevic."
Thursday's events in Belgrade have been welcomed by prominent world leaders.
President Clinton said: "The people of Serbia have spoken with their ballots, they have spoken on the streets. I hope the hour is near when their voices will be heard and we can welcome them to democracy, to Europe to the world's community.
"And when they do, we will move as quickly as possible to lift the sanctions and build the kind of real partnership that the people there deserve."
Even Milosevic's last ally finally appeared to desert him. Russian President Vladimir Putin declared that he wants to see an end to Yugoslavia's international isolation and for the country to develop along democratic lines.
