An international panel decreed yesterday that the strategically vital Brcko, hitherto controlled by the Serb Republic, should become a self- governing neutral entity, under international supervision.
Given the fierce claims upon it by both the Serb Republic and the Muslim- Croat federation, the other component of post-war Bosnia, the compromise decision was no surprise. But that will be no consolation to the Serbs who insist that Brcko, astride the neck of land linking the eastern and western wings of the Republic, must remain under their control.
In a second and almost simultaneous blow, which is bound to enrage Serbs opposed to the Dayton deal, the most senior international peace co-ordinator in Bosnia removed their hardline president, Nikola Poplasen, on the basis that he was obstructing implementation of the Dayton peace accords.
Carlos Westendorp said Mr Poplasen abused his powers by refusing to nominate a prime minister who could win a majority in the more moderate Bosnian Serb parliament. Mr Poplasen has also been vociferous in his demands that Brcko remain in Serb hands.
As the crisis mounted last night, the entire Bosnian Serb government resigned, while Mr Poplasen refused to step down, denouncing Mr Westerndorp as an "imperialist".
Nato is taking no chances, and yesterday sent extra peace-keeping forces on to the streets of Brcko.
The American embassy in the Bosnian capital, Sarajevo, urged Americans to stay clear of the Serb parts of Bosnia for the time being.
The decision resolves the last major territorial issue outstanding from the Bosnian war - one on which Dayton almost came to grief three years ago. The administration of Brcko, with a population of 90,000, will in future be shared by Croats, Muslims and Serbs, closely monitored by allied peacekeepers.
Tensions also showed no sign of abating over Kosovo. Yugoslavia yesterday again challenged the West by refusing to allow an entry visa to Bob Dole, the former US Senator, as the leading powers stepped up their efforts to nail down a peace agreement in the province before renewed fighting tears it apart.
With senior Kosovo Albanians indicating they are ready to sign an interim peace deal before talks resume at a military base in Normandy in nine days, the West believes that it at last has the opportunity to place before Belgrade a choice it has so far been able to avoid - of either signing the take-it-or-leave-it deal, or have it imposed by the force of Nato arms.Reuse content