'WE thought it couldn't happen here."This is the somewhat naive cry from the ancient Croatian coastal city of Dubrovnik, the "jewel of the Adriatic." Serbian-led Yugoslav Army forces have launched artillery and mortar shells on 13th and 14th century buildings, including fortress towers, churches, and city hall. Dubrovnik's layout, including many streets, dates back to Roman times. The city is on the UN "World Heritage List" as a place whose care is "the responsibility of mankind." It has zero military importance - though its importance as a symbol of the Yugoslav struggle grows every day. That Dubrovnik would be sacrificed to the expansionist aims of Serbia and the often-blind independence drive of Croatia testifies to how serious the Yugoslav war has become. Neither Napoleon nor the Nazis destroyed the city. Yet the high stakes game being played by Serbs and Croats themselves has put a historic treasure on the sacrificial altar. Time will tell why matters got this far in Dubrovnik. One theory holds that Croats placed significant firepower in the old district, taunting the Serbs to attack and calculating that the resulting local and world outcry would be worth the cost of lost treasures - the price of independence, if you will. Extremist Croatian forces have sworn to defend the city at all cost when residents would rather surrender it. Reliable sources say a Croat cannon was placed on the building next to the hotel housing EC mon itors and journalists that was shot at this week. Another theory suggests Dubrovnik is under attack so Serb President Slobodan Milosevic can punish Croats by spiting them - quite a believable theory. If captured, Dubrovnik will be a big bargaining chip in future negotiations. Both theories are probably true. In the meantime, Dubrovnik is also under attack by ethnic Serbs from eastern Herzegovina, hill people who hate the city. And, if taken, it is expected to be looted by nearby Montenegran Army reservist thugs. Serbs didn't count on a worldwide outcry over Dubrovnik. This is a public relations disaster for them and a tragedy for us all. The Army should acknowledge its mistake in bombing the ancient city and guarantee its future safety.