Miracle-worker pulls off deal among feuding Bosnians

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The Europeans wheedle and threaten to little or no effect. United States Secretary of State Madeleine Albright harangues Presidents Tudjman and Milosevic in public - and in vain. But when Richard Holbrooke steps back onto the stage the feuding leaders of former Yugoslavia suddenly, almost miraculously, agree to a host of issues that have held up all progress on the Bosnian peace deal for months and even threatened to plunge the country back into armed conflict.

Yesterday Mr Holbrooke, the US envoy who pulled off the peace deal for Bosnia at Dayton, Ohio, in December 1995, pulled off another deal on diplomatic posts, the telephone system and passports - all of which had appeared totally insoluble until he arrived back in former Yugoslavia two days ago on another whirlwind diplomatic mission at the request of President Bill Clinton.

Under the package, Bosnia's ambassador to the United Nations will be a Muslim, Washington will go to a Serb and Tokyo to a Bosnian Croat. The other 30-odd diplomatic postings will be distributed equably between the three communities.

Leaders of the Muslim-Croat federation and the self-governing Bosnian Serb entity also agreed to set up a commission on the Bosnian telephone network - the business of a single country code having bedevilled ties between the two Bosnian entities and assumed enormous, sinister, significance for the Serbs.

Several disputes evaded solution even by Mr Holbrooke. Among them are Bosnia's new currency and final responsibility for issuing passports and resolving questions of citizenship. Both are pressing issues for the Bosnian Serbs, as they will affect their independence from the Sarajevo government. The Serbs want to unite their currency with Belgrade, not Sarajevo. They also want to give several hundred thousand Serb refugees from Croatia full citizenship, which Sarajevo opposes.

But the US envoy was satisfied. "These are steps forward and pretty solid ones," he said after 10 hours of meetings.

The US and the European Union states suspended recognition of Bosnia's present, Muslim-dominated ambassadorial corps after an internationally imposed deadline for the distribution of posts among Muslims Serbs and Croats ran out on 1 August. German officials yesterday said they would now recommend their partners to resume diplomatic contact with Sarajevo immediately as a result of the talks..

Mr Holbrooke yesterday headed for the northern town of Banja Luka to show his support for the so-called "moderate" Bosnian Serb President, Biljana Plavsic, in her powerstruggle with the former Bosnian Serb president and indicted war criminal Radovan Karadzic.

After his triumph at Dayton in 1995, which ended Bosnia's bloody three- and-a-half-year civil war, Mr Holbrooke left the diplomatic field for private business. Since then, Bosnia's peace process has all but collapsed and the more emollient tactics of his successors in mediation have only persuaded the Bosnian factions that they can get away with not fulfilling any of the Dayton provisions. President Clinton's fears that it would not be possible to withdraw 8,000 US peacekeepers next year, therefore, led to the bullish Mr Holbrooke being recalled for this one-off special mission.