Mladic warns of wider conflict

Banja Luka - Even as a constitutional deal for Bosnia was being agreed last night in New York, the Bosnian Serb Army commander, General Ratko Mladic, was warning of even greater destruction if peace talks failed to end the war.

"It is logical to expect the disputed questions to be solved by diplomatic means. But if war continues, even greater suffering will be produced, not only in this area but wider as well," General Mladic said in the Serb stronghold of Banja Luka in western Bosnia.

His words were a reminder that, though the constitutional scheme may be taking shape, there is still a long way to go before the fighting stops.

Yesterday's negotiations were the first formal peace talks since a US- brokered agreement in Geneva on 8 September which proposed keeping Bosnia's external borders intact while dividing the state internally.

Since then, the situation has been revolutionised by a Croat-Muslim offensive across western Bosnia which has redrawn the map of the country, cutting Serb-held territory from 70 to 50 per cent and leaving Banja Luka embattled.

General Mladic rejected Muslim demands to demilitarise the city, swollen with tens of thousands of Serb refugees. "The Muslim side ... has been raising unreasonable and unjustified demands," he said when asked whether the Serbs would consider Bosnian government demands that Banja Luka, the largest town controlled by the Serbs, be demilitarised.

He blamed the battlefield losses on what he said was a coordinated strategy by Nato and neighbouring Croatia with Bosnian Muslim and Croat forces.

"Some 70,000 troops of Croatia's armed forces took part in attacks on Bosnian Serb territory in the wake of Nato's bombing campaign," General Mladic said of the air-strikes launched on 30 August.

General Mladic, considered one of the most hardline Serb leaders, gave only hints as to what areas his forces might give up under the peace plan, which offers the Serbs control of about half of Bosnia, sharing the country with a Muslim-Croat alliance.

The Bosnian Serbs are represented at the peace talks by the Serbian President, Slobodan Milosevic, and his ministers.

Mr Milosevic, widely credited with having instigated the Bosnian war in a bid to create a "Greater Serbia", is keen to make peace to get sanctions against his country lifted.