Bosnian city where freedom still reigns: Marcus Tanner reports from Zenica, where tolerance and a cultural mix survive in an area almost totally cut off from the outside world

CUT OFF from the outside world by Serbian insurgents and high mountains is a land that is for ever Bosnia. In Zenica, at the heart of the republic, the blue-and-white Bosnian fleur de lys flaps from every flagpole, adorns hotel reception desks, the khaki uniforms of soldiers and even car registration plates.

Where the blue-and-white flag flies, there - say Zenica's mostly Muslim inhabitants - is 'Free Bosnia'. And in spite of the Serbian military success in overrunning 60 per cent of the republic's territory, there is growing confidence in Free Bosnia that the tide may be turning in their favour.

'We were not prepared to take on the fourth-biggest army in Europe,' said Besim Spahic, the mayor of Zenica, 'but now we have a forceful army of our own which is not only defending but taking the initiative. We will soon be in a position to break the siege around Sarajevo.'

Zenica lies in the middle of Free Bosnia. One hundred kilometres (62 miles) north-east, the city of Tuzla forms one front line. Fifty kilometres south-east lies the front line near Sarajevo. Free Bosnia is almost totally sealed off from the outside world. There are no trains, newspapers or telephones, except for lines within the city. Local journalists communicate with their editors in Sarajevo on amateur radios. Free Bosnia possesses only one link with the world, a gravel track that twists and turns over high mountain passes into Croat-controlled Herzegovina, and thence to the sea.

Inside this cut-off world, swollen by an influx of thousands of refugees fleeing Serb-controlled territory, the old, tolerant Bosnian way of life somehow survives. The mayor's staff includes Serbs and Croats. So does the high command of the Bosnian army. In Zenica's bars and clubs, where hundreds of fashionably dressed youngsters congregate in the evening, and where disco music drowns out the call to prayer from the mosque, Muslims, Serbs and Croats still mix.

But Free Bosnia is endangered not only by Serbian tank and air attacks. From the south a more subtle threat encroaches in the form of the Croat-controlled region called Herceg-Bosna. The Croats' control over the one road that leads to the outside world gives them a good opportunity to further their own designs in Bosnia. 'Their methods are very different from the Serbs, but their aims are the same, to divide Bosnia,' said a local man.

The mayor of Zenica says he is 'extremely grateful' to Croatia for taking in waves of Bosnian refugees and supplying Bosnia with some food and weapons. But as the Bosnian army gets on its feet, disputes with the Croats are sharpening. An aid convoy to Zenica was cut off this week when the Bosnians refused to give the Croats in Herceg-Bosna 20 per cent of the aid. An aid worker in Zenica complained that 'it was the worst kind of blackmail'.

The blue-and-white flag flies unchallenged over Zenica. But other towns in the region have been forced to join Herceg-Bosna against their will. Nearby Busovaca was forced into Herceg- Bosna after a brief battle, which the Croats easily won. The Muslim leaders of the town were not consulted. The Croats simply proclaimed Busovaca part of Herceg- Bosna. 'The Croats have more guns,' said Midhat Kasap, a local journalist. 'They want many towns which never belonged to the Croatian people.'

Some of Zenica's residents fear that the Croats have designs on their city, although 60 per cent of the 110,000 inhabitants are Muslim. Mr Spahic is uneasy. 'The Croats say that Herceg-Bosna is only a temporary arrangement, until the war ends, but many signs suggest that it is no such thing.'

In Mostar, the headquarters of Herceg-Bosna, the new Croatian order does not have a temporary air. Although the city is predominantly Muslim, the government is in the hands of a Croatian military council. The red-and-white Croatian flag flies over the rooftops. On every wall, posters exhort local men to enlist with the Croatian- Bosnian army.

Everywhere, graffiti eulogises the Ustashe, the pro-Nazi movement that ruled Croatia in the Second World War. The Croatian soldiers, kitted out in sinister black shirts and dark glasses, do not welcome foreign visitors.

For the moment, the blue-and- white flag stands between Zenica and an uncertain future in Herceg-Bosna. 'It is more than a sign that we belong to Bosnia,' a local official said. 'It is a sign that this city is under civilian rule.'

Vlado, a Serb, said he was grateful he had found refuge from war-torn Sarajevo in this shrunken piece of Bosnia. 'These people still have a sense of humour,' he said. 'They still say, 'God save us from Serbian pride and Croatian culture'. I am inclined to agree.'