'Critical phase' for peace talks

BELGRADE - International mediators said yesterday after meeting Serbia's hardline President, Slobodan Milosevic, that talks on ending war in Bosnia had reached a critical stage.

'It is an absolutely historic moment for the negotiations,' the European Community envoy, Lord Owen, declared after the four-hour meeting.

'All of us agreed, including Milosevic, that we must find peace,' the United Nations special envoy, Cyrus Vance, said.

Mr Milosevic told reporters: 'There is no doubt that we are all together willing to support the peace to prevail in this area.' 'I want to assure you that Serbia supports all peaceful moves and measures,' he said. 'The only way out is the immediate cessation of hostilities.'

But yesterday evening, fierce fighting broke out in many districts of the besieged Bosnian capital of Sarajevo after several days of calm, Bosnian radio said. It reported fierce shelling of the Novi Grad district, with more than 50 shells falling on Stari Grad.

The fighting began in earnest minutes after the Yugoslav President, Dobrica Cosic, broadcast a warning to Bosnian Serbs that they faced military attack by the United States and Nato if they did not compromise. He said Serbs were faced with a stark choice - fight the West or accept the Vance-Owen plan. The outcome of the Geneva conference would 'determine the final decision on military intervention . . . against the Serbian people in Bosnia'.

Last weekend the mediators presented leaders of Bosnia's three warring factions - Serbs, Muslims and Croats - with a peace plan that would divide the republic into 10 autonomous provinces with a reduced role for the central government. Bosnia's Muslim President, Alija Izetbegovic, offered to accept the plan, but demanded in return that the Serbs pull back long-range guns from around Sarajevo and other stategic regions.

In his television address, Mr Cosic appealed for the formation of a 'government of national and state salvation' comprising all parties elected last month to the federal parliament. Mr Milosevic's Socialists and extreme nationalists won a majority.

Mr Vance and Lord Owen want Mr Milosevic to persuade the Bosnian Serb leader, Radovan Karadzic, to accept their plan. Yesterday, there were media reports that Mr Karadzic had scheduled an emergency meeting of the Bosnian Serb leadership for tomorrow to discuss the plan before the Geneva conference reconvenes on Sunday.

Lord Owen has urged the international community to delay military intervention until the outcome of Sunday's talks but warned the Serbs against 'indefinite delaying action'.

PARIS - France said yesterday the three warring republics in former Yugoslavia had agreed in principle to declare Sarajevo an open city and that forces besieging the town would withdraw to a distance of 20 miles, Reuter reports.

The Foreign Minister, Roland Dumas, told the cabinet the presidents of Bosnia, Croatia and the rump Yugoslav republic had given their agreement in principle at meetings with him last weekend. But President Francois Mitterrand later told reporters that the rival militia leaders in Bosnia had yet to give their response.