Muslims denounce new Bosnia carve-up: Division of territory into three ethnic units hailed as triumph by Serbs and Croats

BOSNIA'S division appeared a fait accompli yesterday as Lord Owen and his fellow mediator, Thorvald Stoltenberg, presided over talks on splitting the state into three ethnic units - a conclusion hailed by Serbs and Croats as a triumph but denounced by many Muslims as a betrayal.

Lord Owen, who believes a settlement should be reached as rapidly as possible, was believed to be pressing Serbian and Croatian leaders for territorial concessions to the Muslims. He was also said to be urging Bosnia's Muslim-dominated presidency to consider carefully what may be the Muslims' last chance for a negotiated peace and a state of their own.

It became clear the Muslims are to be offered about a third of the territory of pre-war Bosnia within a loose confederation, governed by a central authority enjoying limited powers. 'It's not quite peace at any price but one can see that the more intransigent Muslims may view it that way,' said an official close to the negotiations.

Details of plans by President Slobodan Milosevic of Serbia and President Franjo Tudjman of Croatia to parcel out Bosnia's territory were presented to the mediators in a country villa not far from Geneva. The two outlined their terms for a constitutional settlement but said they wanted to negotiate with the Muslims over land.

'They've rather disappointed us by not coming out with anything very specific on the map,' said Lord Owen. 'But maybe that's a good idea because some of the things we heard we didn't like.'

The mediators then brought the two presidents together with a delegation from the Bosnian presidency, now bitterly divided over strategy and war aims. President Alija Izetbegovic and his deputy, Ejup Ganic, stayed away, agreeing to dispatch seven members of the presidency with a mandate only to 'listen to suggestions' and with no authority to negotiate or to sign agreements.

However, it was clear yesterday that the delegation stood apart from President Izetbegovic's do-or-die rhetoric and was conducting substantive discussions. It was led officially by Franjo Boras, a Croat, but its most influential member was thought to be Fikret Abdic, a businessman from Bihac. He and other presidency members have long favoured a negotiated end to the war and opposed President Izetbegovic's personal diplomacy.

Lord Owen and his advisers sensed that division and moved to exploit it in the past week, prompting bitter talk of betrayal and of an Owen-sanctioned plot to dethrone the President.

Mr Abdic has been accused of close links with the Croatian regime and even of acting as its agent. But sources close to the mediators insist that after the admitted collapse of the Vance- Owen plan there remained little choice but to negotiate an end to hostilities and to try to secure the maximum territory and guarantees.

Chancellor Helmut Kohl's last- minute attempt to persuade EC leaders to lift the Muslim arms embargo was criticised by diplomats for raising false hopes for the Muslims.

Lord Owen and Mr Stoltenberg dined with the presidency delegation last night to reinforce that message.

Mitterrand sends in troops, page 10