MESSAGE FROM SERBIA

By KARSTEN PRAGER/BELGRADE

We believe that Serbs have the legitimate right to live in one country. If we must fight, then, by God, we will fight. --Slobodan Milosevic, 1991

Why think about national states and ethnic purity at the end of the 20th century? The main rule of the contemporary world is integration. Nationalism isolates people. It is crippling. -Slobodan Milosevic, 1995

Milosevic wanted to talk -- and talk he did. In five hours of conversation with TIME editors in his office in Belgrade, the President of Serbia had a succinct message for the world and specifically for the Clinton Administration: Lift the U.N.-imposed sanctions against Yugoslavia, and together we can bring peace to the Balkans in a matter of months. Trust me.

It was quite a proposition from the man who was called "The Butcher of the Balkans" not so long ago. The interview was his first with an English-language publication in more than a year, and that he gave it may be itself some indication of his seriousness-or of his plight.

Milosevic, the man held responsible for much of the bloodbath in the former Yugoslavia, has decided that after three years of war in Bosnia and Croatia, after untold rapes, the loss of an estimated 250,000 lives and the forced displacement of millions in a campaign of "ethnic cleansing," he wants to be known as a peacemaker. That this is a tactical move, given his history and practice, seems beyond dispute. But whether what he offers may also constitute a real step toward an end to the tragedy of the Balkans is as unclear as his motivation.

A senior Western diplomat in Belgrade says the initiative results from the Serbs' "overloaded circuits": the Bosnian Serbs' brutal conduct of the war and the sanctions against Yugoslavia have isolated Serbia from the world community; the Bosnian Serbs show signs of becoming weary of the fight; and Belgrade has nothing more to gain from the conflict. But there is another theory: Milosevic's ultimate goal after peace is reached, he says, is some sort of re-confederated Yugoslavia. And who better to lead such a regional, pan-Slavic conglomerate than himself?

What seems clear is that Milosevic -- consummate tactician, political chameleon, master of the bob and weave and, for all that, the key player on the Balkan scene -- has determined that his interest now lies in distancing himself from the Bosnian Serbs and in the process apparently trying to put the genie of Serb nationalism back into the bottle from which he coaxed it in the '80s. If the sanctions are lifted, Milosevic says, he will personally lead a campaign to deliver the Bosnian Serbs to the peace table-and will bring off a comprehensive regional peace "within six months." What is also clear is that to lift from Serbia (or from Milosevic, or both) the burden of being an international pariah, he has made substantial efforts behind the scenes to prove his good offices.

TIME has learned from several sources that just days before U.S. Air Force Captain Scott O'Grady was rescued from the Bosnian woods, U.S. Deputy Assistant Secretary of State Robert Frasure got from Milosevic the first news that the flyer was alive-and assurance of his safety. Frasure had been in Belgrade trying to negotiate a deal in which sanctions could be suspended in return for Yugoslavia's recognition of Bosnia-Herzegovina. In saying goodbye to Milosevic one afternoon, he told the President that Washington feared the pilot was dead. Not so, replied Milosevic: "We know he is alive." He told Frasure that searchers had found a used parachute as well as other equipment apparently abandoned by the pilot, and that he had instructed the regional military commander that O'Grady should be protected and, if found, sent immediately to Belgrade, where he would be released. Milosevic told a friend that he had plotted the pilot's exact coordinates for Frasure and instructed local commanders to refrain from shooting at planes sent to the rescue. Frasure sent a flash message to Washington relaying his conversation with the President, but the information remained in diplomatic channels and did not reach U.S. intelligence officials until two days later. By that time, the rescue was about to get under way.

The O'Grady shoot-down came in the midst of the U.N. peacekeepers' hostage crisis, and sources told TIME that here too Milosevic proved his usefulness. Following two NATO air strikes, the Bosnian Serbs had detained more than 370 U.N. peacekeepers and taken them to various locations, chaining some to potential targets of further air attacks. On the morning of June 2, Milosevic told Frasure that, while his action had nothing to do with the sanctions negotiations, he had acted to "save the national pride of Serbia." According to notes of the meeting, he declared that "taking hostages ... is like shooting someone carrying a white flag." Milosevic said that he had sent his chief of state security to Pale, the Bosnian Serb stronghold, to tell Radovan Karadzic, the Bosnian Serb leader, and General Ratko Mladic, his military commander, that they would be arrested-and worse-if every one of the hostages was not freed, healthy and rearmed. As the day wore on with little news of progress in Pale, Milosevic fretted about Karadzic's word "meaning nothing." Said he: "I would not pay five cents for their promises before they are fulfilled." He told Frasure that food, drink and medical supplies had been sent in for the hostages' trip out by convoy, and that he had dispatched his own Serb commandos to provide security for the handoff and the journey to safety. Quipped Frasure: "Just make sure, Mr. President, that there is plenty of cold beer at the end of the trip." When word came that the first releases would not be made until late in the evening, Milosevic became visibly enraged. "Those bloody liars," he said of the leaders in Pale. "They are a disgrace, those bloody bastards. I told them I would kill them all if they betray me on this. I will get the hostages out if it's the last thing I do, Mr. Frasure, believe me." And so he did.

Though there seems no longer to be any love lost between Milosevic and Karadzic, the relationship between Belgrade and Pale remains complex and insidious. Dialogue and cooperation persist despite the fact that Milosevic broke relations last August with the self-proclaimed Republika Srpska, when it refused to sign on to the Contact Group peace plan for Bosnia. Members of its leadership were banned from Serbia, and the western border with Bosnia was closed. One notable exception to the ban is General Mladic, who was a general in the Yugoslav National Army (J.N.A.) before becoming commander of the Bosnian Serb military, and is frequently seen in Belgrade. Though Milosevic does not say so publicly, he is known to hope and believe that Mladic will eventually put his popularity among the Bosnian Serbs behind someone other than Karadzic-and that such a move will mean Karadzic's downfall.

Belgrade's Mladic connection is all the more significant because Western intelligence services claim there is ongoing cooperation between the J.N.A. and the Bosnian Serb military. U.S. intelligence officials in Washington say they have solid evidence that an "integrated air-defense system" based in Belgrade is feeding the Bosnian Serb antiaircraft network information on NATO overflights such as O'Grady's (see box). Milosevic insists no such system exists, but TIME has learned that the U.S. National Security Agency and the CIA have plotted the coaxial cable system that connects Bosnian Serb flak sites with Belgrade, while spy satellites have identified adjunct microwave- and radio-transmitter locations. "We have unequivocal intelligence that Milosevic has his hand in the cookie jar," says a U.S. Defense Department official. "It's as good as what we had on the Soviets during the Cuban missile crisis." One of the joint air-defense sites is just outside Pale -- a two-dome radar installation sheltered under reinforced concrete and sitting on huge, shock-absorbing springs. Built by the Yugoslav military prior to the war, the complex is said to be hardened enough to withstand anything but a nuclear attack. Bosnian Serb soldiers told TIME Correspondent Edward Barnes that the Pale radar ranges out over the Adriatic, which nato planes have to cross on their way from Aviano, their base in Italy, to Bosnia.

Cooperation on the ground is more difficult to pin down. While Milosevic claims that the Bosnian Serb army has enough hardware not to have to depend on resupply from Serbia, Western intelligence maintains that fuel, ammunition and spare parts continue to be provided by the J.N.A., and that J.N.A. funds are being used to pay many officers in the Bosnian Serb and Croatian Serb armies. The J.N.A. also supplements their officer corps. In mid-May, after Croatia's incursion into Serb-held Western Slavonia, Belgrade sent J.N.A. General Mile Mrksic to replace the officer who took responsibility for the defeat. Well known in Croatia, Mrksic commanded an artillery unit that played a key role in the destruction of Vukovar in 1991. He also took part in a Bosnian Serb attack on the eastern Bosnia enclave of Gorazde in April last year.

When he was appointed commander of the Croatian Serb forces in mid-May, Mrksic declared that he wanted to create a highly professional army. Since then he has set up mobile brigades equipped with tanks and artillery, and is said to have initiated the rounding up of Croatian Serb refugees of draft age in Serbia. Though Milosevic denies it, since mid-June police in Serbia have been sweeping up military-age Serbs born in Bosnia and Croatia -- at least 3,000 by some estimates-and shipping them back for instant induction into Serb armies.

last week Yugoslavia won a 75-day extension of the suspension of some sanctions, allowing international air travel as well as cultural and sports exchanges. The U.N. certified that according to its frontier monitors Belgrade has been living up to the commitment to keep all but food, clothing and medical supplies from crossing into Serb-held Bosnia; whatever leakage the U.N. detected it considered "not significant." Says a Western diplomat in Belgrade: "Milosevic closes his eyes to certain things on the border, but then it's impossible to totally close a border in the Balkans."

The sanctions left in place are painful enough. Out of a labor force of 2.3 million, 1 million people are jobless and about 700,000 have been temporarily laid off. Gross national product dropped from $2,330 per capita in 1991 to $1,225 in 1993, the latest figure available. An estimated 2 million of Serbia's 10 million people live below the poverty line. The embargo also limits the country's ability to make an industrial recovery. Sanctions-busting on a grand scale -- mainly through Romania and Bulgaria and, to a lesser extent, Macedonia -- keeps stores filled with all manner of goods, but few people can afford them at whatever price.

Still, Milosevic says he sees the sanctions discussion in far more than just economic terms. His argument is that the embargo constitutes the single most important obstacle to a comprehensive regional peace. "Serbia is a major factor for peace in the Balkans," he says, "but we are under sanctions; we are in prison. The international community is making a mistake in expecting us to run in our struggle for peace but do so with the chains of sanctions on our legs." Once the embargo is lifted and a comprehensive peace is in place, he says, economic and other links will bring the former constituent republics of the old Yugoslavia together in a new kind of alignment driven by economic and cultural interests of long standing-part of a larger integration of Balkan countries that would validate an approach to the European Union. To outsiders at least, such a scenario seems unlikely -- given the bloody passions of the past.

Milosevic says his plan requires a partnership between the U.S. and Yugoslavia as overseers to bring the settlement about, a process he describes as "Americanizing the peace," which, given America's reluctance to engage in the region, seems equally unlikely. He first produced the draft of his proposal last March during secret (but White House-sanctioned) meetings with Democratic Congressman Bill Richardson at Karadjordjevo, a presidential hunting lodge in northern Serbia. Richardson had been invited by Milosevic to pass on to Washington an offer of cooperation, but the Congressman was tasked by the Administration to take the occasion to urge Milosevic to use his muscle to prevent the Croatian Serbs from pressing for the expulsion of U.N. peacekeepers from Croatia. Milosevic obliged. But what he cared most about was his plan, which Richardson took back to Washington. In it, Milosevic said Yugoslavia would recognize, among other things, "that Bosnia-Herzegovina should be a union of the Bosnian Croat federation and the Republika Srpska," both equal and both with the right to confederate with Croatia and Serbia, respectively. The Bosnian Muslims, without an adjacent motherland to support them, would be left in the lurch.

The proposal fell on deaf ears in Washington, in part because it seemed to be nothing new, in part because its requirement for lifting sanctions up front seemed to require blind faith. "We need an insurance policy in case Milosevic cannot control the Bosnian Serbs," says a senior Administration official. "Milosevic, for his part, is scared to death of what he considers the feckless American political process. He says, 'What happens some day when [what he calls] the German-Muslim lobby on Capitol Hill says let's reimpose sanctions?' Milosevic is dug in on reimposition, and so are we." Milosevic wants reimposition to be in the hands of the Security Council, where the U.S. is sure a Russian veto would scuttle a renewal of the embargo should that become necessary. The Clinton Administration wants to preserve as much unilateral control over the reimposition process as possible and envisages suspension of the embargo in stages, one of which would be Bosnian Serb acceptance of the Contact Group peace plan. The Administration also needs a deal that is viable in domestic political terms. The ability to reimpose sanctions by fiat if the accord came apart would make it so.

Given the nature of the war in the Balkans and his own history, Milosevic is clearly a dicey partner. A communist apparatchik under Tito whose parents both committed suicide, he rose to significance in the party as head of the gas monopoly and the largest state bank. He made his political mark in 1987 with a fiery speech to the Serb minority in the province of Kosovo. Many consider that speech the beginning of his rise to power, as well as of the Serbs' nationalist passion and the wars that were inspired by it.

If he feels personally burdened by the disaster that followed, the 53-year-old president gives little sign of it. "Well, everybody made mistakes. I am aware of mine," he said at one point during the interview, and at another: "Nobody is innocent. There is no innocent side. The only innocents are civilians, regardless of their nationality." Milosevic denies, as he always has, any involvement in ethnic cleansing, detention camps and mass rapes that have become the hallmarks of the Bosnian war; and Western governments have never officially charged him with direct responsibility for war crimes. But some argue that given the amount of intelligence available, the West simply must not have tried very hard. Why? In part because making the link to Milosevic would have been most inconvenient for nations attempting to avoid greater involvement in the war during its desperately bloody early stages, and more recently because it would substantially weaken Milosevic as a factor in any diplomatic solution while leaving him in firm charge of half of the old Yugoslavia.

In fact, though, TIME has learned that at least two Western governments had contemporaneous intelligence that convinced them that Milosevic's responsibility for ethnic cleansing and the general conduct of the war in 1991 and '92 were direct and clear. A former Western diplomat has notes of officially authorized intelligence briefings received from two Western governments in late 1992, just after the Bosnian Serbs had unleashed another major round of ethnic cleansing. The briefings were based on communications intercepts and other intelligence sources. According to the notes, the conclusion reached was stark: "The general staff in Belgrade is obedient to Milosevic. Belgrade doesn't plan only the movement of Serbian forces . The war in BH [Bosnia-Herzegovina] was carefully planned by the top political and military leadership in Belgrade. In BH, Mladic has multichannel communications to both his subordinate commanders and to the [Belgrade] general staff and Milosevic." Despite Milosevic's assertion that there were only 2,000 or so paramilitaries-he calls them "bandits and killers"-responsible for the war crimes, this former diplomat concludes, "It was an elaborate and very systematic series of campaigns, employing a combination of military assets and local paramilitaries. They didn't sweep through 70% of the country in three months just using local maniacs."

While the U.N. War Crimes Tribunal in the Hague has indicted 22 people on a variety of charges ranging from genocide to rape, all of them Serbs and many believed to be living in Serbia, Milosevic refuses to allow the tribunal's investigators to operate in his country. "There is a very clear article in our constitution," he says, "that citizens of Yugoslavia cannot be extradited and must be tried here." The fact is, though, that there have been only two prosecutions, both of Croatian Serbs. Milosevic also refuses to allow observers from the Organization for Security and Cooperation in Europe to monitor what one human-rights organization calls Serbia's "rational, systematic" repression in the province of Kosovo, epitomizing "the technique of the modern fascist state."

Milosevic's obduracy on such matters, among other things, leaves the U.S. and its allies deeply divided on the question of his reliability as broker of a Balkan peace. In the Clinton Administration, U.N. ambassador Madeleine Albright leads the list of those said to despise Milosevic; others in the State Department, while skeptical of him, think he is worth a risk: After all, what choices are there? This week Senator Robert Dole is expected to renew his call for lifting the arms embargo, which would give Bosnian government forces the ability to wage war with the Serbs on a more equal footing. At a moment when the future of the U.N. peacekeeping presence in Bosnia is in question and when Croatian troops appear to be deploying for an offensive against the Croatian Serbs that many expect in a matter of weeks, it is small wonder that Milosevic's overtures are taken seriously even by those who ultimately dismiss them. "My judgment," says a senior Administration official close to the situation, "is that he can deliver. But opinion is divided in Washington. He has embarrassed a lot of people there." The same official, however, admits, "If he got what he wanted in his briefcase, he could bring about the end of the war." As Congressman Richardson puts it, "Like it or not, Milosevic is the key player in the region. And we haveto deal with him, come hell or high water."

--With reporting by Massimo Calabresi and Marguerite Michaels/ Belgrade and J.F.O. McAllister, Douglas Waller and Mark Thompson/Washington

With reporting by MASSIMO CALABRESI AND MARGUERITE MICHAELS/BELGRADE AND J.F.O. MCALLISTER, DOUGLAS WALLER AND MARK THOMPSON/WASHINGTON