Peace talks break up as Serbs prepare to take Mount Igman: Marcus Tanner reports from Sarajevo as assault cuts supply line and UN fears 32,000 refugees will flee in panic to city

SARAJEVO faced military catastrophe yesterday after Serbian forces appeared within inches of overrunning the last Bosnian-held mountain guarding its western approach.

United Nations troops in the capital said that Mount Igman, less than two miles from the western edge of the village of Hrasnica, a few miles outside Sarajevo, was falling rapidly to advancing Serbs after a short overnight battle. They said the Serbs have surrounded Igman on the north-west, the south-east and the south-west with troops and tanks.

Nato warned the Serbs on Tuesday that they could face air strikes if they continued their 'strangulation' of Sarajevo, where 380,000 people are trapped by a 16-month siege.

In Geneva, the peace negotiations on Bosnia broke down last night after news of the Serbian advances on Igman prompted the Muslim-led government to boycott the talks. The failure in Geneva, coupled with increased military pressure on Sarajevo, is likely to renew pressure from Washington for the use of Nato air power.

The Serbian assault on Igman violated the 30 July ceasefire in Bosnia between the three warring armies, and cut the last supply lines for food and weapons between Sarajevo and Bosnian-held territory to the south-west. The advance opens up the possibility of Serbian forces descending from Mount Igman to enter the exposed western suburbs.

General Ratko Mladic, the Bosnian Serb commander, boasted during talks with Croat and Muslim army chiefs at Sarajevo airport that Serbian forces controlled Igman. 'Yes sir, come and have a look,' he told Western journalists with a broad grin.

The UN refugee spokesman in Sarajevo, Peter Kessler, says that the fall of Igman is likely to spark panic - with up to 32,000 Muslims trying to flee from Hrasnica and other hamlets on the slopes of Igman across the free- fire zone of the airport to the city. 'The vast majority of people below the mountain will flee into the city but will have no safe passage. They can be easily targeted by snipers. Sarajevo has been shattered by a year of fighting and cannot sustain another 30,000 refugees - it would have a dramatic impact.'

UN observers confirmed that part of the Bosnian army on Igman has withdrawn to Hrasnica, leaving an inadequate force in trenches to confront the Serbian advance with rifles and machine guns. They saw convoys of lorries and heavy artillery rumbling along the road from Serb-held Trnovo, a few miles south of the mountain, towards Igman in preparation for the final battle.

'Mount Igman is virtually cut off,' said the UN spokesman in Sarajevo, Commander Barry Frewer. 'It remains to be seen whether it can hold out as it is ringed by the Serbs. We are witnessing a consolidation of Serb gains in the area.'

The fall of Igman was almost inevitable after the Bosnian Serbs took the neighbouring higher mountain of Bjelasnica over the weekend. UN observers at Bjelasnica on Monday were treated to the sight of General Mladic gloating at the top of the mountain beside a freshly hoisted Serbian flag.

He bounded in and out of a Gazelle helicopter, demonstrating the ease with which Serbs flout the UN flight ban. He even insisted on giving observers a guided tour of the smouldering ruins of several Muslim villages which Serbs had seized and burnt to prove their control of the region.

The observers were convinced the Serbs will not withdraw from Bjelasnica or Igman, in spite of a promise to pull back, given in Geneva by the Bosnian Serb leader, Radovan Karadzic. 'General Mladic is there to stay, and is not prepared to withdraw,' Commander Frewer said. 'He was very confident and defiant. He is acting like a man who questions whether the West will ever challenge him.'

After the fall of Igman a rapid decision on carrying out air strikes against Serbian heavy artillery positions round Sarajevo becomes more urgent if the civilian population of the city is to be spared the final catastrophe of conquest by the Serbs.

Most Sarajevans fear that the UN will never confront the Serbs, and may opt to negotiate the surrender of Sarajevo along the lines as the deal over Srebrenica. Although that town was declared a 'safe area' by the UN, it is overcrowded, defenceless and half starved. The Serbs outside keep supplies of food and water for the 50,000 trapped Muslims at an absolute minimum.

The Bosnian Vice-President, Ejup Ganic, said his outgunned forces had no chance of holding off the superior might of the Serbs, while the arms embargo was in place. 'Our only protection is our trenches, from which we fire a single bullet each time a Serb comes close. We are reduced to defending ourselves with kamikaze

tactics.'

He called on the West, and on the US in particular, to decide the fate of Sarajevo.

Serb plan for city, page 8

Letters, page 21

Media images, page 23