The alliance issued an "activation warning," which means it is asking the 16 member governments what planes and missiles they want to deploy for the operation.
The move, according to NATO's secretary-general, takes NATO to what he called "an increased level of military preparedness."
But he says more decisions need to be made by governments before NATO moves.
Meanwhile, Serb artillery pounded the last pockets of separatist resistance in Kosovo Thursday. Serb police sources say they've taken over a main road through the last remaining stronghold of the Kosovo Liberation Army.
The move comes a day after the U.N. Security Council demanded a cease-fire in Kosovo.
With this new offensive, Serbian government troops are in a hurry to finish the job before the US and its NATO allies can get around to intervening, reports CBS News Senior European Correspondent Tom Fenton.
"Everything has been burned," one ethnic Albanian woman says, "everything."
In fact, the new Serb offensive is driving the ethnic Albanian population out of the last stronghold of the Kosovo Liberation Army (KLA), which is fighting for independence from Serbia.
For seven years, the U.S. has been promising the Albanians of Kosovo this would not happen. Now that Kosovo is being ethnically cleansed, the Albanian population feels betrayed.
"Everything for seven years was lies," says Pleurat Sejdiu, who speaks for the political wing of the KLA.
The victims of the Serb offensive are mostly civilians. Aid agencies warn that thousands will die if food and shelter are not provided for up to a quarter of a million homeless.