Bosnia and Serbia bury the hatchet

The presidents of Serbia and Bosnia agreed yesterday to establish diplomatic relations between their two countries, dealing a severe blow to Bosnian Serb hopes of splitting Bosnia and uniting the Serb-controlled zone with Serbia. Presidents Slobodan Milosevic and Alija Izetbegovic reached the agreement in Paris at talks hosted by President Jacques Chirac of France.

The breakthrough was announced two days after the United Nations lifted sanctions imposed on Serbia in 1992 in retaliation for Mr Milosevic's role in fomenting rebellions by Serb minorities in Croatia and Bosnia.

"The time of confrontation and conflicts should be replaced with a time of construction and prosperity," Mr Milosevic and Mr Izetbegovic said in a joint statement.

The Serbian-Bosnian agreement mirrors an accord signed by Serbia and Croatia last August. Crucially, it states explicitly that rump Yugoslavia (Serbia and Montenegro) acknowledges Bosnia's independence and territorial integrity.

In effect, more than five years after the fighting in former Yugoslavia broke out, Mr Milosevic has renounced the very goals that launched him on the path of war. These were to unite all the Serb populations of former Yugoslavia into one state, and even to annex parts of Croatia and Bosnia to create a Greater Serbian state.

As things have turned out, Mr Milosevic's achievement boils down to the almost total destruction at Croat hands of historic Serb communities in Croatia, and the creation of a Bosnian Serb Republic in Bosnia that is a pariah in the world and hostile to him personally. Yet he has the consolation of ruling unchallenged in Serbia and being viewed by Western governments as a man whose co-operation was essential to securing peace in the Balkans.

The Serbian-Bosnian accord does not necessarily mean that Bosnia's internal problems become easier to solve. The Bosnian Serb leadership campaigned in last month's Bosnian elections on a platform of secession from Bosnia, and candidates supporting this message were victorious in Serb-populated areas.

Perhaps the most difficult challenge facing post-war Bosnia is how to return as many refugees as possible home, and thereby end the physical separation of nationalities which occurred in the war and which Bosnian Serbs and Croats seem determined to maintain.