Serbs vow to stay put in Croatia enclave

GLINA, Croatia (Reuter) - An agreement resolving the Serbian insurgency in Croatia is unlikely unless the Croatian government tones down its nationalist politics, Serb and UN sources in the breakaway Krajina region say.

Talks on a permanent ceasefire and disengagement of forces in an area covering a third of Croatia began yesterday at the Russian embassy in Zagreb, the second stage of a superpower peace initiative in former Yugoslavia.

Serbian military and UN sources could not imagine the agenda being expanded to reassert Croatian sovereignty over Krajina - Zagreb's ultimate goal. A senior Serbian officer close to the Krajina delegation in Zagreb said negotiations could not go beyond setting undisputed demarcation lines. Krajina Serbs would never surrender sovereignty even if that meant ostracism by the world and possible Nato threats such as those used to rein in their Bosnian brethren.

'The ultimate idea for us is to have Krajina and Croatian forces withdraw to respectable distances with the UN moving in to create a Cyprus in the Balkans,' the officer said, referring to the partitioning between Greeks and Turks.

'The only long-term solution would be the rise of moderates into the Croatian government who would say, 'Fine, let's recognise each other and start trade and communications'.' Asked what the Serbs would do if Nato threatened air strikes or UN forces cut the rebels' arms supply, as Croatia would like, he said: 'You'd have to pull every UN soldier out of Krajina. Otherwise they would become instant hostages.'

Krajina Serbs rose up in 1991 when Zagreb seceded from Serb- dominated federal Yugoslavia. A January 1992 ceasefire froze front lines and UN troops deployed in volatile regions. The truce has been violated many times.

UN sources in the Krajina, a militarised frontier region of crumbling, impoverished towns such as Glina, said there was so much fear and hatred of Croatia that reintegration was inconceivable now. While Krajina's 250,000 Serbs were demoralised by their poverty and isolation since Yugoslavia broke up, they could not accept being reduced to minority status in nationalist Croatia.