Will America pack up its troubles?

Revelations that the US turned a blind eye to Iranian supplies of weapons for the Bosnian Muslims could not have come at a worse time for the Clinton presidency. For years, Washington had tiptoed between four contradictory policies in the Balkans: moral support for the Muslims, a commitment to the Europeans who had troops on the ground, a determination not to be sucked into the war and an official but sullen respect for United Nations resolutions, which banned the supply of weapons to any of the belligerents in the conflict.

Just like in Nicaragua, Cambodia and the Lebanon during the last decade, Clinton's attempts to square the Balkans' vicious circles have resulted in a laughable outcome: the same administration that argued for the supply of weapons to the Muslims in order to prevent Bosnia from falling under Islamic fundamentalist tendencies has, apparently, sanctioned arms sales from the most fundamentalist Middle Eastern government. And, undeterred, it is now the same administration which suggests that fresh weapons should be delivered to the Muslims in order to reduce this Iranian involvement.

European governments are unlikely to be surprised by these revelations; they suspected all along that strange deals were being hatched behind their backs by the US. But the Europeans will be deeply worried by the fallout from this dispute, for the Balkans are now back on the political agenda in Washington during a presidential electoral campaign. From now on Clinton's options will be dictated more by what is popular at home, rather than what is feasible in Bosnia.

And the signs are that the President's choices will undermine rather than bolster the peace process.

A fruitful policy would be the targeting of economic aid. Carl Bildt, the former Swedish prime minister and now civilian administrator of Bosnia, has spent the last weekend trying to persuade the US to support a programme of economic reconstruction; a bridge restored or a water supply reconnected in Bosnia will be much more beneficial than the obsession with high-profile political projects such as "free elections" in a country that has no law and no valid electoral rolls.

After a long period of dithering, the US administration managed to obtain from Congress authorisation to spend $200m on such a programme, in return for a promise that American firms will get a substantial slice of the lucrative reconstruction contracts now in the offing. The Balkan tour of Ronald Brown, the US Commerce Secretary, was intended to illustrate that Washington was serious about getting its "fair share" of this work. But the tragic end of this visit - in which a leading administration official and all his accompanying businessmen perished - has reinforced the image that the Balkans now amount to a mixture of bad policies and misfortunes wrapped into one. The idea that American companies will now rush to invest in Bosnia is fanciful.

So, instead of reconstruction from below, which will be slow in coming, the Americans are likely to insist on stitching Bosnia from above, by holding elections this September. Yet this can only aggravate the situation. With half the population displaced, the people of the divided republic will either elect representatives from constituencies in which they no longer reside, or vote where they happen to live now, which will be tantamount to accepting the results of ethnic cleansing.

The Europeans are fully aware of these dangers. Nevertheless they are doomed to follow America's megaphone diplomacy in the Balkans - promising the recreation of the Bosnian republic - while having none of the financial instruments to make inroads into the situation on the ground.

But this dispute pales into insignificance if compared to the other US tactic: supplying weapons to the Bosnian Muslims. From the American perspective, arming the Muslims avoids their worst nightmare. They are terrified that come the end of the year, when the troops have to be out of Bosnia, they will be forced to stay because their withdrawal could unleash another war. According to the US reasoning, therefore, if the Muslims have their own army, this will diminish Bosnia's dependence on foreign Islamic fundamentalists, spur military co-operation between the Muslims and the Croats and create what they gingerly call a "strategic balance".

Few arguments are more misconceived. First, there is no need to supply weapons in order to eliminate Islamic fundamentalists: Nato has done this already and the Bosnians are forced to eliminate Islamic militias under the provisions of the Dayton accord. More importantly, far from strengthening Croat-Muslim co-operation, the supply of weapons will sever any chance of stability. The stronger the Muslims get, the more the Croats will be intent on crushing them, and the more an alliance between Serbia and Croatia against the Muslims becomes feasible.

Finally, Washington's claim that it knows a magic formula by which the Muslims will be supplied with just enough weapons to defend themselves, but not so many as to encourage renewed warfare was, and remains, nonsense.

For now, a stalemate continues: the Europeans are resigned to some rearmament of the Muslims, but hope that the White House will soon lose its appetite for the entire enterprise. If Clinton is re-elected, for instance, he will no longer have the same political need to support the Muslims.

The biggest problem surrounds the military operation in the Balkans. Officially, the European military is determined to leave when the Americans withdraw. In practice, some European troops will have to stay. The question is: who ends up in charge? Just about the worst outcome would be one in which the Bosnian operation reverts to European command, for this would encourage American irresponsibility.

If a force remains in Bosnia, therefore, the Americans will have to remain involved.Nobody wants to discuss the issue: the Europeans hope that by keeping quiet, the Americans will be forced to stay, and Washington assumes that by officially sticking to the withdrawal timetable, it will get the Europeans to do more in the Balkans.

Franjo Tudjman, the Croat leader, and Slobodan Milosevic, the Serb strongman, follow this diplomatic pirouette with great interest. Tudjman suspects that a rift between the Europeans and the Americans will allow Croatia to impose its control over Bosnia. And Milosevic assumes that, once the US withdraws, the Europeans will allow Serbia to emerge from its isolation much faster.

Only the poor Muslims still assume that - despite all the current rows in Washington over their dealings with Iran - the administration will keep US troops on their side for years to come. They are likely to be disappointed: Bosnia is rapidly becoming a troublesome nuisance for America, a conflict in which the best strategy usually consists of finding the nearest exit door.

The writer is Director of Studies at the Royal United Services Institute in London.