Talk of war blasts hopes for Croatia peace plan

The "Zagreb Four" group of international diplomats yesterday presented a plan for a political settlement of the conflict in Croatia under which the Serbs would surrender half of the land - and the hope of independence or union with Serbia - for substantial autonomy. The plan, suggested by the US, Russia, the European Union and the United Nations as a basis for negotiations, is an attempt to broker a compromise and avert the threatened resumption of war. The plan emphasises the territorial integrity of Croatia while seeking to reassure the country's Serbian minority of its rights.

But, it is unlikely that either side will react to the proposal with enthusiasm. Although Croatia would regain two of the four UN Protected Areas that now lie inside the "Serbian Republic of Krajina", it would have to concede extensive regional autonomy.Zagreb might stomach this in the case of the Krajina Serbs but would be loath to extend the same rights to the other restive Croatian regions, notably Istria.

The plan, which has not yet been made public, was presented yesterday to the Croatian President, Franjo Tudjman, and to the Krajina Serb leadership in their stronghold in Knin. The envoys had hoped to visit Belgrade today to seek the support of the Serbian leader, Slobodan Milosevic, but have postponed the trip.

Under the "Z4" proposal, the autonomous Serbian region would consist of a continuous L-shaped territory hugging the north-west Bosnian border. The Serbs would control taxation, police, education, tourism, housing and public services. Zagreb would act forforeign affairs, defence, trade, transport and communications. A parallel Serbian currency, valid throughout Croatia, was suggested, along the lines of the Scottish pound.

Krajina would be demilitarised and the border with Bosnia monitored either by UN or Croatian forces. The local police would reflect the pre-war ethnic population. The regular Croatian army would not be allowed to enter Krajina, except at the invitation of the Krajina president.

The two UN-protected areasdue to return to direct Croatian control - where Croats were in a majority before the war -would be administered by the UN for at least five years. The areas would be demilitarised and villages or towns with a pre-war Serbian majority would be entitled to autonomy.

Zagreb would be expected to adhere to rigorous standards of human rights, ensuring the security of Serbs and other minorities. Foreign judges would sit in a new constitutional court. The plan also allows for dual citizenship of Croatia and of rump Yugoslavia.

"In 1990, when the Serbs wanted cultural autonomy, this would have been a good solution, but in 1995 - no way," an observer in Zagreb said. The Krajina Serbs are relatively happy with the status quo; The Croatian Serbs believe that the division of country, now written in earth, will eventually be confirmed on paper.

Croatia has demanded the withdrawal of the UN peace-keeping force, hoping to force the Krajina Serbs into a weaker bargaining position through the threat of another war for the control of the territory.

It appears that President Milosevic holds the key to the settlement. If he supports the plan, he could force the Serbs in Croatia to follow suit, strengthening Zagreb's hand. But if he rejects it, the Krajina Serbs will know that they can count on Belgrade's help in a new battle.