Serb resistance collapsed in the face of a Croatian artillery barrage that left dozens of dead and wounded civilians in Knin's streets. "The streets are deserted apart from bodies," said Colonel Andrew Leslie, the UN chief of staff in Knin.
In Zagreb, thousands celebrated by hooting car horns, waving flags and singing patriotic songs. The victory compensated for their humiliation in 1991, when Serb rebels, backed by the Yugoslav army, seized 30 per cent of Croatia.
The difference this time was that President Slobodan Milosevic of Serbia, who masterminded the 1991 insurrection, refused to rescue the Krajina Serbs. The only area where he seems intent on maintaining Serb control is Eastern Slavonia, a part of Croatia bordering Serbia where the fiercest artillery exchanges for 18 months broke out yesterday between Croatian and rebel Serb units.
It took less than 36 hours for Croatia's armies to shatter the Serb nationalist dream of a Greater Serbian state extending from the Adriatic Sea to the Danube. Thousands of Croatian troops swept through Krajina in a blitzkrieg ordered by President Franjo Tudjman with cautious encouragement from the US.
As in 1991, when Serb forces bombarded Croat civilians, the Croat offensive killed many ordinary Serbs. Susan Angle, a UN official, said seven civilians died and 11 were wounded when a shell exploded 100 yards from the UN headquarters in Knin.
The Croatian forces did not spare UN peace-keepers in their path. Two Czech UN soldiers died yesterday of wounds incurred when the Croats attacked their observation post near Gospic. UN officials say the Croats have also killed a Danish peace- keeper and have captured or destroyed 40 UN observation posts during their offensive. Witnesses described "epic scenes of chaos" as thousands of Serb refugees attempting to flee Krajina for Serb-held areas of Bosnia jammed roads with cars, lorries, tractors, and cattle. Aid workers said they feared up to 100,000 Serbs would abandon their homes in Krajina, triggering the largest forced movement of Serbs since the Yugoslav wars erupted in June 1991.
With vivid memories of the slaughter of Serbs in the 1940s at the hands of a short-lived Croatian Fascist state, few Krajina Serbs trust Croatian promises of fair treatment. The rebel Serb leader, Milan Martic, appeared yesterday to have gone into hiding.
The Krajina Serbs are descended from warriors who settled in the region 300 years ago to form a line of defence for the Habsburg Empire against Turkish invasion. Such is their attachment to their homeland that they and their descendants may never lose hope of recapturing it, a factor making for long-term instability in the Balkans.
UN officials said 4,300 Serbs had arrived from northern Krajina in the Bosnian Serb city of Banja Luka, where they were placed in schools and a sports centre. Banja Luka is a centre of Serb nationalism, where militants have expelled virtually all Muslims and Croats and blown up every mosque.
Croatia's victory in Krajina has serious implications for Bosnia's Muslim- led government, as it now finds itself squeezed between a Croat-dominated area in the west of former Yugoslavia and a Serb-dominated area in the east. Mr Tudjman and Mr Milosevic have previously discussed partitioning Bosnia between their two countries.
Croatia's triumph may have two unwelcome consequences for the Bosnian government. The Bosnian Croats may revive their ambition of uniting their region of south-western Bosnia with Croatia, and the exodus of Krajina Serb soldiers and refugees into Bosnia may enable the Bosnian Serbs to strengthen their depleted armies and populate areas that have been "cleansed" of Muslims.
For the moment, however, the Croat-Muslim alliance is holding. Muslim forces in the Serb-encircled Bihac region of north-western Bosnia broke out yesterday and linked up with Croat forces on the Croatian-Bosnian border.
Nato was also involved in the Krajina fighting. Two US Nato jets fired two missiles at a Krajina Serb missile site in what a US military spokesman said was a response to imminent attack.
Hundreds of British tourists in Croatia appear safe, as most are in the northern peninsula of Istria, far from war zones.
"The only complaint we have had is that the weather is too hot. We were taking more bookings only yesterday," said a spokesman for Phoenix Holidays of west London.
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