The Serb-Croat pact adds up 'to a declaration that they are both determined to defeat the Muslims by military means since they can't do so here at the conference table', one diplomat said.
In effect, the pact rules out a war in the spring between Belgrade and Zagreb, which many had feared. Bosnian Serb and Bosnian Croat leaders have agreed to establish official relations and examine economic ties, a move further designed to reinforce the impression that the two intend to carve up Bosnia between them.
The agreement came on the eve of a critical visit to Bosnia by Douglas Hurd, the Foreign Secretary, who is expected to assess the future of British forces with the United Nations peace-keeping operation.
'We cannot seem to break the deadlock,' said a grim- faced Lord Owen, the European Union mediator. 'They will fight, in my judgement.' All three parties have agreed, in principle, to return on
10 February, but there is little hope of progress.
Lord Owen said he and his co-chairman, Thorvald Stoltenberg, had failed to win agreement on a plan to submit disputed territory to binding arbitration through the International Court of Justice.
The declaration by Serbia and Croatia was signed by the foreign ministers of Bosnia and the rump Yugoslavia. The two have been at war since June 1991. Serbia's President, Slobodan Milosevic and Croatia's President, Franjo Tudjman, looked on without noticeable enthusiasm.
The deal was struck as the mediators once again tried to wrestle a compromise from the Muslim-led Bosnian government. Despite the Serb-Croat agreement, President Alija Izetbegovic stuck to demands for the return of all land seized by force and a reversal of ethnic cleansing. Bosnia's UN ambassador, Muhammed Sacirbey, described Western policy as 'without conscience'.
Both sides will open representative offices in Belgrade and Zagreb, but there is no mutual recognition, a difficult concept while Serb forces occupy about a third of Croatia. But the Croatian Foreign Minister, Mate Granic, said reopening transport, communication and trade links would be a high priority.
The UN High Commissioner for Refugees, Sadako Ogata, expressed new fears for 'tens of thousands of innocent civilians'. She said: 'It is absolutely unconscionable that children in Maglaj have been reduced to skin and bones; that 65,000 people in Gorazde are denied children's shoes and shelter materials . . ; that 55,000 people in Mostar have to live beneath the rubble of their destroyed city.'
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