Before NATO's 1999 intervention, the Liberation Army of Presevo, Medvedje and Bujanovac fought Serbian police and troops, claiming it was protecting Albanians in southern Serbia's Presevo Valley.
The police in Gnjilane said the 47-year-old Xhemailia was killed in a drive-by shooting near the Gnjilane-Urosevac-Pristina road.
The police have not been able to find any trace which would point to the perpetrators, motives or witnesses.
Xhemailia was known as a member of the extremist wing of the Liberation Army of Presevo, Medvedje and Bujanovac. He was also a member of the Albanian Democratic Party.
Albanian politicians from Presevo Valley have condemned the murder and voiced conviction that Serbian secret services are behind it. They have said the situation in the valley will escalate and stop the positive processes which have been conducive to the stabilisation of this area.