The new round of talks is aimed at persuading Bosnia's Muslims to accept a plan to turn the country into a confederation of three republics. Bosnian radio reported that Bosnia's collective presidency had agreed in principle to attend the Geneva talks this week if certain conditions were met, including a firm ceasefire and the restoration of Sarajevo's utilities.
After meeting Serbian President Slobodan Milosevic and Croatia's Franjo Tudjman, Mr Stoltenberg said the negotiating atmosphere had improved and it might be possible to achieve a peaceful solution in the next two to six weeks. Lord Owen, however, said acceptance of a three- way, ethnically based confederation was unlikely to be achieved so quickly.
In a joint statement after the meeting, the Serbian and Croatian leaders denied that they had any intention of partitioning Bosnia between them.
The confederation plan has been approved by the Bosnian Serbs and Croats, but rejected by most Muslim leaders, including President Alija Izetbegovic, although he has hinted at a softening of his line.
A UN-brokered accord signed by Croats and rebel Serbs on Friday sought to avert all-out war over a strategically important road bridge in the Serb-dominated Krajina enclave in Croatia. The agreement means Croatia can re-establish vital north-south transport links.
Last night UN officials said Fojnica, 28 miles west of Sarajevo, was believed to have fallen to the Bosnian army, triggering an exodus of 3,000 to 5,000 Croats to Kiseljak, a nearby town already swollen with refugees.
A spokesman said 250 mentally retarded children had been left without care in Fojnica after their nurses were evacuated by the Croatian militia. A militia hospital was set on fire in the fighting and there was concern about the fate of 30 patients in wheelchairs.