Inside Story: Peace? What Peace?: At the Yugoslav peace talks everyone thought Slobodan Milosevic had agreed to change. Steve Crawshaw and Tony Barber found him to be master of political trompe-l'oeil

THE SERBIAN president, Slobodan Milosevic, was in relaxed mood at his Knightsbridge hotel suite last Thursday night, personal bodyguards close by. He sipped a whisky, smoked a cigarillo, and talked of the conference on Yugoslavia that had just ended at the Queen Elizabeth II Conference Centre in Westminster.

The two-day meeting had brought together the six former Yugoslav republics, the United Nations, and two dozen foreign ministers from Europe and other parts of the world. It had been exceptionally heavy on anti-Serbian rhetoric - the German foreign minister, Klaus Kinkel, accused the Serbs of 'genocide' and 'crimes against humanity'. Though not billed as an opportunity to settle the Yugoslav conflict once and for all, it had agreed a set of tough-sounding measures which would (so the Western politicians declared) force Belgrade to compromise.

But if Mr Milosevic was a man who had taken a political beating, he did not look like it. Speaking to The Independent on Sunday, he joked and exuded bonhomie. He only rarely gives newspaper interviews, but now he was explaining why, in effect, he was planning to ignore the commitments to which he had agreed earlier in the day.

The world's politicians had told Serbia to change its ways and warned of serious consequences if it failed to do so. In the words of John Major, 'If we do not get co-operation, the pressure will inexorably increase. Condemnation, isolation. Parties who stand in the way of agreement can expect even tougher sanctions, even more rigorously policed. No trade. No aid. No international recognition or role. Economic, cultural, political and diplomatic isolation.'

But here was a cheerful Mr Milosevic, saying that he was not planning to change his policies - there was no need to. 'We have a policy for peace. If anything stays the same, it's that. All our efforts in recent months have been oriented towards peace. I will not allow anything in my policies to be against peace.'

There seemed to be a misunderstanding, to put it mildly. Everybody else thought Mr Milosevic had agreed to change; he thought he had agreed not to change. Did he not fear that this could lead to increased tension, or worse, between Serbia and the rest of the world?

'No, I don't believe so. I believe that they will clarify their picture of Serbia.'

As Mr Milosevic talked, it became apparent that almost every pledge he had undertaken was a kind of political trompe-l'oeil. For example, Serbia had agreed to clean up its human rights record in Kosovo, a province of Serbia with an ethnic Albanian majority. The main opposition party, supported by most Kosovo Albanians, is illegal; Albanian schools and colleges have been closed; and the province is in the grip of the Serbian police and political authorities. However, Mr Milosevic professed to see no problem since, contrary to the opinion of human rights groups worldwide, he believed there had been no serious abuses in the first place.

'I think there must be some examples of this in every place - in England, too. But any violations of human rights are the subject of a penalty and not tolerated.' In any case, he said, the opposition were not behind bars. 'They are free, they have press conferences. They're free to walk through Belgrade.' So: no change on Kosovo.

On the prosecution of war criminals, which was discussed by the conference, Mr Milosevic became enthusiastic, though he excluded himself as a possible defendant. 'If there is any citizen of Serbia who is involved in any crime, he will be the subject of criminal prosecution. There is no doubt of that.'

Asked about specifics, however, the Serbian leader was less keen. He was clearly unwilling to consider prosecuting Arkan, the nom de geurre of one of Serbia's notorious paramilitary leaders, whose forces were responsible for particularly brutal attacks against Bosnian Muslims last April.

In theory, all sides agreed in London on preserving the territorial integrity of former Yugoslav republics, and accepted that borders cannot be changed by force. But Mr Milosevic did not seem to take that too seriously, either. Speaking about areas of eastern Croatia that the Serbs seized last year with the Yugoslav army's help, he insisted: 'There must be negotiations with the legitimate representatives (that is, the self- proclaimed Serbian authorities in the occupied areas) to discuss their status.'

TO JUDGE from the Serbian leader's comments, then, much hard work lies ahead before a settlement to the Yugoslav conflict can begin to take shape. This was, indeed, what the participants in the London conference were saying even before the talks started. The UN Secretary-General, Boutros Boutros-Ghali, said last Tuesday that he hoped the conference would 'create a new momentum' to tackle the intractable problems of the Balkans. British officials cautioned that the talks would not produce 'a quick fix'.

Most importantly, there was little sign of compromise from the three parties to the Bosnian war. As the conference opened on Wednesday, Sarajevo experienced its most intense mortar attacks and gun battles in more than a month. Bosnia's Muslim foreign minister, Haris Silajdzic, commented: 'We have had conferences, negotiations, talks, while more and more people have been killed and expelled. We cannot go on indefinitely.'

Radovan Karadzic, the Bosnian Serb leader, retorted: 'Whenever we have a conference, the Muslim side intensifies the fighting from Sarajevo. We have to respond when we are really endangered.'

So while the Muslims insisted that the West should offer immediate military support to the Bosnian government, Mr Karadzic's attitude was equally intransigent. He asserted repeatedly that Bosnia-Herzegovina did not exist as a independent state, even though it is a UN member and the Western powers have refused in public to consider its dismemberment. 'Our people wanted to stay in Yugoslavia. If that is not possible, then we want our own state within the existing borders of Bosnia,' he declared.

Little was said at the conference to dispel the impression that Bosnia's Serbs and Croats have tacitly agreed to carve up the republic between them. Mr Karadzic's forces control about two-thirds of Bosnia, and the Croats have established their own mini-state in western Herzegovina.

By the end of the conference, Mr Karadzic appeared to soften his position by suggesting that the Bosnian Serbs might give up some of their conquests. He also suggested that he would notify the UN within four days of the positions of all Bosnian Serb heavy weapons and hand them over to UN control within a week. But similar promises have been made before and, as a British official conceded, 'the clock has not started' on demilitarisation because the rival parties have still to agree to the process at talks opening in Geneva this week.

DOUGLAS Hurd, the Foreign Secretary, said that the conference had gone well but 'what counts is what happens on the ground, not today or tomorrow but in the next few weeks'. Other actors in the drama were similarly cautious. Giving the German view, Mr Kinkel said: 'Scepticism is still called for. I still cannot see where the road is leading. It will continue to be difficult, very difficult.'

A member of the Bosnian presidency, Stjepan Kljuic, was even more outspoken. Speaking in Sarajevo on Friday, as yet another mortar barrage was unleashed on the capital, he called the conference a 'catastrophe' and a step back for his country.

Others, too, had cause for complaint. The conference sidestepped the question of extending diplomatic recognition to Macedonia. Given that so many experts have warned that the war may spread to the lower Balkans, it seemed strange that this problem was left in abeyance. The reason is that it was inconvenient for the European Community and the United States to highlight the fact that it is one of their own allies, Greece, which is holding up recognition of Macedonia.

The EC, in particular, perceives a need not to upset the Greeks at a time when it is trying to keep everyone on board for the Maastricht treaty. But the result is that instability is deepening in Macedonia and is likely to become dramatically worse if, as seems virtually inevitable, Kosovo descends into violence between Serbs and Albanians. Refugees would pour into Macedonia, and the 500,000 Albanians there - one-quarter of the population - would be inclined to go to the aid of their compatriots in Kosovo.

Ironically, those who seemed most satisfied with the outcome were the Serbs. Certainly, they disliked the ritual denunciations of their policies. They also argued that the conference seemed deliberately to ignore a fundamental element of the Balkan crisis: the fact that, with the break-up of Yugoslavia, the Serbs alone were left with a large proportion of their people living as minorities in what were rapidly turning into foreign countries - Croatia and Bosnia- Herzegovina.

Nevertheless, the Serbs were pleased that the conference imposed no new sanctions on Serbia and that the major world powers were still not considering direct military intervention. Even though the nine-nation Western European Union agreed after the conference to tighten the enforcement of sanctions in the Adriatic and the Danube river, that seems unlikely to cow the Serbs into instant submission.

In the Western view, the heart of the problem remains Mr Milosevic, who, ever since he became Serbian Communist Party leader in 1987, has shown a remarkable ability to whip up nationalist sentiment in order to consolidate his power. Most notably, he gave voice to grievances over Kosovo, a province which many Serbs see as the ancestral heartland of Serbian culture, but where the Serbian position has been eroded.

His successul purge of the Serbian media led to a press that had once been one of the most liberal in the Communist world conducting a hate campaign against the Croatian government, which it identified as the direct descendant of the Nazi-supported puppet regime that killed hundreds of thousands of Serbs in the 1940s. Mr Milosevic harnessed nationalist feeling more successfully than any other Communist had done.

Speaking to The Independent on Sunday, however, he remarked: 'I strongly believe that nationalism has no place at the end of the twentieth century.' Suggest to him that he, too, is a nationalist, and he just starts talking again about 'peace'.

Mr Milosevic's statements seem so spectacularly at odds with visible reality that it is difficult to know what is in his mind. Some argue that he deliberately tells cynical lies. Others suggest that, as an old Communist Party boss, he has become used to saying things which he neither believes nor disbelieves.

IN Mr Milosevic's hotel suite, it was getting late, and the bodyguards were getting restless. The presidential plane was due to leave at half past midnight. Mr Milosevic wondered aloud if he would be able to fly over Austrian airspace, and complained that some countries were being obstructive about allowing his plane through. UN sanctions mean that Belgrade airport is closed for international flights; each flight needs special UN authorisation.

The country that Mr Milosevic was returning to - whether you call it Serbia, or rump Yugoslavia - faces enormous uncertainty and difficult choices. Mr Milosevic, as he sat in Knightsbridge, seemed confident that he could postpone such choices into the indefinite future.

He could tell the world's politicians that he was ready to go along with whatever they wanted. Yet a few hours later, he was ready to explain to a journalist how his 'yes' means 'no', and how two plus two makes approximately three.

In territorial terms, Serbian forces are winning the war. In other respects, their victory is turning sour. The economy is collapsing, partly because of sanctions, more because of the costs of the war and chronic mismanagement. In the long run, Serbia's military expansionism will surely prove untenable. The conference spent much time telling that to the Serbs, but rather less thinking about what arrangements should be made after the war for Serbs living outside Serbia.

Mr Milosevic's own political strength remains unclear. He seems more powerful than the enthusiastic Serbian-born businessman from California, Milan Panic, who is the new prime minister of the rump Yugoslavia. Mr Panic's claim that he would win any battle with the Serbian president received a studied response from Mr Milosevic: 'I think Panic wanted to show his independent position - and that's a good thing for a prime minister.'

During opposition demonstrations in Belgrade earlier this year, Mr Milosevic suggested that he might step down at the end of the year. But on Thursday night he denied that he was ready to move into the background. On the contrary, he expressed confidence that he would continue to be Serbian president for some time. 'If I go into an election, no doubt I would be elected.'

Eventually, Serbs may decide that enough is enough. But it is by no means certain that they are yet ready either to rebel openly against Mr Milosevic or even to vote him out.

Child's view of war, Sunday Review

(Photographs omitted)