Mr Milosevic's decision to confront the Bosnian Serb leadership with an ultimatum, and then close the border along the River Drina through which the breakaway republic is supplied, is the most calculated gamble of his political career. The apparent risks of his strategy were underlined at his tense final meeting in Belgrade less than a fortnight ago with the Bosnian Serb leaders. According to diplomatic sources, when Mr Milosevic threatened to close the border, General Ratko Mladic, the officer commanding the Bosnian Serb army, retorted by saying he would lead his troops across the Drina to retake the border, thus raising the spectre of civil war in Serbia itself.
Mr Milosevic is said to have remained silent, apparently nonplussed. The Bosnian Serbs' decision on Friday to provoke air strikes by Nato forces has prompted speculation that they may be seeking to turn public opinion in Serbia itself against Mr Milosevic's tough stand.
Mr Milosevic was rebuffed last year by the Bosnian Serbs when he urged them to accept the Vance-Owen plan - and also then briefly closed the border, only to back down ignominiously. But this time he appears to have prepared the ground much more thoroughly.
Mr Milosevic clearly now believes he has the upper hand in his dealings with the Bosnian Serb leadership. Extreme nationalists in Serbia, such as the volatile self-proclaimed Chetnik leader Vojislav Seselj, immediately denounced Mr Milosevic's move. Mining the rich seam of Serbian political invective, Mr Seselj called on the Serbian President to resign and accused him of 'drinking three to four bottles of whisky a day' and talking to no one except his wife, Mira Markovic.
Mr Seselj's rage is understandable. It is scarcely more than two years ago that he was working hand in hand with Mr Milosevic to feed the nationalist flames that led to the war - during the election that conferred on the Serbian President what democratic legitimacy he has.
But diplomats who have met Mr Milosevic over the past fortnight have found him not only cold sober but confident and determined to face down the Bosnian Serb leadership. The Serbian police are widely believed to be compiling a dossier on claims of war profiteering and corruption against Radovan Karadzic and his colleagues which, significantly, have started to surface over the past few weeks in the pro- Milosevic press. The most spectacular allegation is that Mr Karadzic, a noted casino gambler, and Momcilo Krajisnik, the powerful speaker of the Bosnian Serb parliament, stashed away in private bank accounts up to pounds 6m from the sale of new cars requisitioned from the VW plant in Sarajevo.
There remains the question of why Mr Milosevic chose to act so decisively now. There was a steady build-up of diplomatic pressure on the Serbian President to persuade him first that the five-nation contact group - US, Russia, Germany, France and Britain - were serious about enforcing a virtual economic and political blockade of Serbia if he did nothing, and secondly that Washington saw itself under irresistible pressure to escalate miltary action against the Bosnian Serbs.
This took the form not only of a highly publicised visit to Belgrade by Andrei Kozyrev, the Russian Foreign Minister, and Vitaly Churkin, Moscow's roving envoy, but also a more discreet British government mission 10 days ago which included David Manning, the UK contact group representative.
Second, there have been real fears within the Serbian political leadership about the effect of existing economic sanctions. Dragoslav Abramovic, Belgrade's central bank chief, is reported to have warned a group of financiers privately that the Serbian economy could virtually collapse within three weeks unless sanctions were eased.
Finally, Mr Milosevic may simply have judged that this was the best opportunity to confront the constant threat to his own authority posed by the Bosnian Serb leadership.