NEW VICTIMS, NEW VICTORS

By Kevin Fedarko

Ljubica Milic was drenched with rain last Wednesday as she sat with her two sleeping children at an abandoned gas station on the road between Banja Luka, the largest city in Serb-held Bosnia, and Belgrade. As an equally sodden string of refugees streamed past, the young Serb from the Croatian village of Obrovac explained how she had been tricked by a war profiteer into making the worst deal of her life. "All I had was 200 deutsche marks [$139]," she says in a voice devoid of emotional inflection. "He asked me for 500 deutsche marks to get me to Belgrade, and I told him I would sleep with him for the difference. I did, but he fooled me, so I'm here in the middle of nowhere with no money, my kids and no way to get to Belgrade. All I have left is my body."

Nearly 150,000 Serbs like Milic spent most of last week fleeing before the army of Croatian President Franjo Tudjman. Tudjman's soldiers needed just five days to conquer Krajina, the crescent-shaped region whose Croatian Serb majority seceded from Croatia in 1991 with the help and encouragement of Serbian President Slobodan Milosevic. Tudjman's victory last week created the largest exodus of refugees since the Balkan wars began; at the same time, the offensive shook up the region's political and military balance of power, and as a result seemed to create an opportunity for peace. The White House is now attempting to seize that opportunity by presenting a new plan for the Balkans. For Bill Clinton, the risks are high: "If we come back with a diluted plan, or if we fail to win acceptance of it, the President is going to look totally incompetent," says an Administration official. For the people in the region, the risks are even higher: as a senior U.S. military source in Europe puts it, "A slight miscalculation on anybody's part, and we face a general Balkan war."

The assault began at dawn on Aug. 4 with a bombardment of the Krajina Serbs' capital, Knin. When more than 100,000 Croatian troops attacked, the Serb army of some 50,000 men seemed simply to melt away. Croatians shelled cities and towns, harassed civilians and engaged in an orgy of looting and burning of Serb homes. "You're not going to see anything like what the Bosnian Serbs are doing, massacres of 3,000 people and such," said one U.N. official. "But it is still bad." Many Serbs still carry memories of the massacres their parents and relatives suffered at the hands of the Croats' pro-Nazi Ustashe government during World War II, and fearful of another pogrom, they left en masse. After inhabiting Krajina for 500 years, the Serbs are now virtually gone from there.

An eerie silence descended on the abandoned towns, broken only by the whimper of untended animals and the clatter of looters. Along the roadsides, hundreds of bicycles lay twisted by treads of Croatian armor. There were also bodies. The corpses of two Serbs who had been fleeing on a tractor lay next to a recently harvested field. By midweek nearly every house had had its front door kicked in. Croat soldiers had casually sorted through rooms, collecting what was desirable and often setting fire to a house once they were done. Near the town of Slunj, Milka Jurcic, a 73-year-old woman wearing an apron that still displayed its price tag, trundled along a deserted road. She was pushing a rusted wheelbarrow filled with packets of soup, pickled vegetables and clothes. Asked if she was fleeing, she answered sheepishly, "No, I'm shopping."

While their homes burned behind them, refugees streamed across the country, tying up every road in northern Bosnia with thousands of vehicles. Profiteers sold gasoline for 10 DMs a liter, tap water for 2 DMs a liter. Wherever the convoys passed, Croats gathered to jeer, releasing a barrage of bricks, boulders and manure. "Monkeys!" they screamed. "Murderers!" "Go back to Serbia!" One of the worst incidents occurred in Sisak, where Croats began pulling people out of their vehicles and beating them; a woman later died from her injuries. In one of this war's strangest twists, more than 30,000 followers of Fikret Abdic, a Muslim who aligned himself with the Croatian and Bosnian Serbs, found themselves camped near the Croatian border, unwelcome anywhere despite an agreement between Abdic and the Bosnian government. "Do you think any country would take us?" Ibrahim Djedovic, once Abdic's chief of security, asked desperately. "Perhaps Singapore?"

By the time the last refugees left Krajina on Friday, Zagreb's victory had completely rearranged the balance of strengths and fears in the Balkans. The Serbs have now suffered their first terrible defeat, and Milosevic's failure to come to the aid of the Krajina has caused bitterness among both his own people and the vengeful refugees flowing into Serbia. The Bosnian Muslims are both better off and worse off than they were before: the Croats, with whom they are allied, have dealt their enemy a serious blow; the Croats have also liberated Bihac, a Bosnian town that the Serbs besieged for 1,201 days; at the same time, however, the Muslims are wary that Croatia may want to carve out a large swath of Bosnia for itself.

If the new circumstances create an opening to bring the parties to the negotiating table, they also create the conditions for a more full-scale war. President Clinton and his aides concluded he had to act in this situation. Part of the concern was parochial: the Administration is painfully aware that its toing and froing on Bosnia has undermined its authority, a potential liability in the 1996 presidential elections. The consequences of Clinton's inability to pursue a credible Bosnia policy could be seen two weeks ago when Congress finally approved a bill to lift the arms embargo on the former Yugoslavia, a move Clinton opposes. He vetoed that bill last Friday; if Congress overrides the veto when it returns after Labor Day, it will be an extraordinary defeat for a President on a foreign policy matter. So Clinton is under pressure to show mettle where Bosnia is concerned.

Reaction to Croatia's offensive initially split the allies. France and Britain condemned the assault, while the U.S. and Germany all but applauded it. By last week, however, each of the Western powers appeared to understand that an opportunity was at hand, and seemed eager to ensure that it not be squandered. With these forces at work, Clinton sent National Security Advisor Anthony Lake to London, Paris and Bonn (Spain, Italy and Russia were later added to the itinerary) with the new plan in his briefcase. Lake was accompanied by Undersecretary of State for Political Affairs Peter Tarnoff.

According to a Pentagon source, the outlines of the initiative are as follows. The Bosnian Serbs would be allowed to keep the 70% of Bosnia that they now control; the remaining 30% would be reserved for a Muslim government. This would be a big change: the current plan endorsed by the "Contact Group"--the U.S., France, Britain, Germany and Russia--and accepted by the Muslims calls for a 51%-49% split in the Muslims' favor. "We're selling out to the battlefield reality," the Pentagon official conceded. However, sources at the State Department insist that the plan is more generous to the Muslims and is based on the Contact Group's proposals, although details of the map will be different.

The plan would leave the Bosnian Muslims with Sarajevo, the central core of Bosnia, the Bihac pocket and the area near Krajina. Gorazde, the remaining "safe area" in the east that NATO pledged itself to protect three weeks ago, would probably be allowed to pass into the hands of the Bosnian Serbs. The Muslims would be offered military training and arms, as well as a significant commitment of U.S. ground troops and air power to protect their boundaries from Serb encroachment. The ground troops, up to 25,000 of them, would be "peace enforcers" with liberal rules of engagement. They would be joined by 45,000 soldiers from other countries, and the entire team would be run by NATO, not the U.N. Under the plan, the Bosnian Croats and Bosnian Serbs could form respective federations with Croatia and Serbia. The economic embargo against Serbia would be lifted in exchange for its recognition of Bosnia's qualified sovereignty. And finally, a mini-Marshall Plan would be set up to pump billions of dollars' worth of economic aid into the region.

One problem for the new U.S. approach is that the Bosnian Muslim army is feeling emboldened. "Now we will start real war," General Atif Dudakvic declared after his Fifth Corps lashed out at the Bosnian Serbs and in two days last week recaptured all the territory it had lost during the Serbs' July offensive. And then there are the Muslims' suspicions of the Croats. Right now the Muslims and the Croats in Bosnia have a federation, but only two years ago they were fighting bitterly, and Bosnians are worried that Tudjman and Milosevic have crafted a secret deal to divide Bosnia between them.

Most experts, and some advisers close to Tudjman, concede that the two leaders did, in fact, reach such an understanding four years ago. But Tudjman's priorities are now said to have changed, and he seems to be bending over backward to assure the Muslims that his interests no longer conflict with theirs. Last week, for example, Tudjman turned down an invitation from Boris Yeltsin to meet with him and Milosevic for a peace conference. Tudjman refused to go because Bosnian President Alija Izetbegovic was not invited.

The toughest issue confronting Tudjman and Milosovic--and the peace plan--is the fate of Eastern Slavonia, the fertile and oil-rich region of Croatia populated by rebel Serbs whom Milosevic controls. If Tudjman, flushed with success, tries to retake that, he will almost surely provoke Serbia's powerful army into a fight. Both Serbia and Croatia have moved forces near eastern Slavonia but have been cautious. According to a State Department analyst, the U.S. hope is that Milosevic will relinquish his control in exchange for the lifting of sanctions and a promise on the part of Croatia that it will not conduct "ethnic cleansing" in the region. But the economic and political cost to Milosevic of giving up Eastern Slavonia would be so high that it seems wishful thinking to believe he would do so on these terms. If the Clinton plan falters on eastern Slavonia, it leaves the biggest source of friction in the Balkans unremedied. "Even a fairly small event there could very rapidly escalate beyond anybody's imagination," says a Western military analyst in Zagreb.

One final difficulty for the initiative is the manner in which it is being presented. In May 1993 Warren Christopher traveled to Europe to discuss Bosnia and, instead of forcefully presenting the new American plan, halfheartedly canvassed the Europeans for their views. Neither the Americans nor the allies have forgotten the waffling and confusion that resulted. "This time," says an Administration official, "it has to be the leader of the free world telling them that this is the way it's going to be. Publicly they'll complain that they don't like to be pushed around, but privately they'll be relieved that somebody is finally taking the lead. And if Clinton doesn't do it this time, it is going to be a disaster."

Such earnest talk may leave cynics wondering whether the Clintonites were still analyzing leadership more than exercising it. The early reports are not encouraging. "The whole deck was reshuffled," said one German diplomat after the meeting in Bonn, "and Lake and Tarnoff came here not showing a great deal of imagination." A French diplomat called the U.S. visit a "very positive element" and said, "We feel that the Contact Group should first develop a common approach and then present it to the parties in ex-Yugoslavia." It would appear that in neither case did the Americans take charge. In 1993 there was only one big bully in the Balkans--the Serbs. Now there are two, and the consequences of still another failure in leadership would be all the more serious.

--Reported by Edward Barnes/Bihac, Massimo Calabresi/Banja Luka, Dean Fischer and Douglas Waller/Washington, Alexandra Stiglmayer/Zagreb and Bruce van Voorst/ Bonn

With reporting by EDWARD BARNES/BIHAC, MASSIMO CALABRESI/BANJA LUKA, DEAN FISHER AND DOUGLAS WALLER/WASHINGTON, ALEXANDRA STIGLMAYER/ZAGREB AND BRUCE VAN VOORST/BONN