In an apparent attempt to stave off tighter sanctions on Serbia agreed by Russia and the West, President Slobodan Milosevic denounced the Pale leadership as 'war profiteers' and said he was closing his border with the self-styled Bosnian Serb Republic.
Serbian television carried a statement from the President saying that 'we have decided to stop the relationship, hoping that at such a moment (Pale) will follow the national interest and vote for peace'.
This severing of ties would take three forms: cutting political and economic links with Pale; barring members of the Bosnian Serb leadership from Serbia; and closing the border to all goods but food, medicine and clothing.
The statement from Belgrade said the Pale leadership's 'refusal of peace' constituted its 'worst act against the Republic of Serbia'. Serbian Television, a mouthpiece of the state, added that it 'caused a storm of accusations between the citizens of Yugoslavia and the world's public'.
The Bosnian Serbs have yet to respond to Belgrade's move; on Wednesday they described themselves as 'insulted and saddened' by threats from Mr Milosevic. But a spokesman in Pale said the mood among Bosnian Serbs was 'a kind of pessimistic perseverance'. 'I don't think they're too pleased,' he said. 'But there's a sense that life must go on.'
Mr Milosevic's announcement followed an assembly meeting in Pale on Wednesday night at which deputies, who rejected the plan, also voted to put it to a referendum on 27-28 August. The plan, drawn up by the international contact group, requires the Serbs to surrender 30 per cent of their battlefield gains to the Bosnian federation of face tighter sanctions on Serbia. Apparently the fear of further economic ruin prompted Mr Milosevic to abandon his clients.
'It seems to be absolutely serious,' said Milos Vasic, an analyst at Vreme, a liberal Belgrade magazine. 'The public barrage of propaganda (against Pale) is almost unheard of . . . It seems sanctions are showing an effect at last.'
The White House reacted positively to Belgrade's move, but said it wanted to see action, not just words. The chief of staff, Leon Panetta, said Washington could act alone to lift the arms embargo on the Muslims embargo if the Bosnian Serbs did not accept the peace plan. 'But first we want to put maximum pressure on them (the Serbs) to come around,' he said.
In northern Bosnia, the Muslim-led Bosnian government scored a significant military victory against its rebel Muslim enemies in the Bihac enclave. Several hundred soldiers loyal to Fikret Abdic, the Muslim tycoon who made peace with Pale and went to war with Sarajevo, surrendered in the town of Pecigrad.
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