Serbia Offered a Carrot, But Will it Use a Stick?

THE Clinton administration has embarked on a risky new diplomatic gamble aimed at averting a massive escalation of the Balkan conflict.

The plan seeks to persuade President Slobodan Milosevic of Serbia to recognize the international borders of Bosnia-Herzegovina and Croatia and end whatever military assistance he is still providing to rebel Serbs in both former Yugoslav republics.

In return, the international community would suspend for two months United Nations economic sanctions imposed in 1992 on Serbia and Montenegro for providing military and economic assistance to the Bosnian Serbs in their conquests and ethnic cleansing of some 70 percent of Bosnia. Mr. Milosevic gave similar support to minority rebel Serbs who overran about one-third of Croatia in 1991.

The new US plan was presented in Paris on Tuesday to Washington's British, French, Russian, and German partners in the so-called ''contact group.'' The group agreed to bring the proposal to Milosevic later this week.

The new US plan reflects growing fears within the Clinton administration and the other contact group members of a massive upsurge in warfare in the next several months.

In Bosnia, fighting around the northwestern Muslim-held enclave of Bihac threatens to unhinge a four-month cease-fire that began on Dec. 31.

Meanwhile, Croatian President Franjo Tudjman had demanded the withdrawal of the UN peacekeeping contingent that since 1992 has been separating his Army and rebel Serb forces controlling the so-called Krajina region.

Mr. Tudjman has been under intense domestic pressure to take a harder line on recovering the territory.

By recognizing the international borders of Croatia and Bosnia, Milosevic would be signaling to their rebels Serbs that he no longer supported their goals of uniting their territories with Serbia and Montenegro in a ''Greater Serbia.''

The Serbian public still generally believes that minority Serbs should not be forced to live in newly independent Croatia because they would be discriminated against and vulnerable to a possible repeat of the mass executions that occurred in Croatia in World War II.

Serbians say they hoped President Tudjman's decision to ask 15,000 United Nations peacekeepers to leave Croatia by June 30 was a bluff, but warned that if Croatia tries to take back Serb-held areas in Croatia by force, Serbia will attack.

''I would definitely go [and fight]. I want to help the Serbs in Krajina,'' says Dragan Bozic, a young man living in Belgrade.

''The public is extremely touchy about the Krajina Serbs,'' says one Western diplomat. ''They are the people who suffered the most during World War II, and there's almost an Israeli 'never again' mentality here.''

An estimated 100,000 Serbs were killed by a pro-Nazi regime in Croatia during World War II.

Croatian officials, fearing a permanent partition of the country, see ordering UN peacekeepers out as a way to pressure Milosevic to recognize Croatia's independence. But Western diplomats and opposition leaders in Belgrade warn that Milosevic cannot recognize Croatia.

''It's such a sensitive area for the Serbs, it would be politically impossible for him,'' warned another diplomat. ''Whatever Milosevic can agree to has to be a compromise.''

If Tudjman's bluff fails and Croatia resorts to a military attack to take back the Krajina, even opponents of Milosevic warn that he will have no choice but to aid the Krajina Serbs.

''Even the pro-peace opposition groups would not see any choice but to get involved,'' says Milan Nikolic, former chairman of the pro-peace opposition Social Democrat Party. ''It would be worse than the last fighting.''

Milosevic, who has been distancing himself from Serbian nationalists and is clearly eager to have the economic sanctions imposed lifted, may have limited his own options.

As a precautionary move against any attempts by more nationalist elements in the Yugoslav National Army to overthrow him, Milosevic has created a heavily armed 80,000- to 90,000-strong national police force. But many of its members are refugees from Bosnia and Croatia. Serbia has also taken in an estimated 400,000 Serb refugees from Bosnia and Croatia who might see abandoning both the Bosnian and Croatian Serbs as unacceptable.

Belgrade based human rights activist Sonja Biserko says that what is unusual about the current situation is that Milosevic -- who is considered a master politician responsible for starting the war -- is reacting to developments instead of dictating them. ''What is really causing the anxiety is that Milosevic is not really controlling the situation,'' she says. ''Milosevic is losing his maneuvering space.''