PALE, the Bosnian Serb ''capital,'' is as far from the real world as you can get. A smallish ski resort a few miles from Sarajevo, its clear mountain air engenders an extraordinary fogginess of mind. A senior Bosnian Serb military man here explained to me not long ago that the Western world, having destroyed two of its major enemies, Communism and (by means of the Gulf War) Islam, was now turning on Orthodox Christianity. Here, too, knowing that I had just arrived from Sarajevo, which was suffering daily attacks by shell and mortar, a high Bosnian Serb official asked me, ''Is it true that the Muslims have almost destroyed my beautiful Sarajevo?'' The Bosnian Serb mind is capable of reaching strange conclusions, but this was the strangest: that all the destruction and violence in this war is caused by Muslim aggression.
The other day I sat opposite the self-styled president of the Bosnian Serbs, Radovan Karadzic, and listened as he explained some of these points to me. For a man who is wanted for questioning by the international commission on war crimes, based in The Hague, Mr. Karadzic cut a mild and rather benign figure. He insisted that he could not understand why the outside world sympathized with the Muslim cause and failed to take the Serbs seriously. I interrupted to suggest that this might have something to do with the fact that his men were bombing and sniping at civilians in Sarajevo every day. But it was just a debating point, and he replied with one of his own: that only the Bosnian Serbs could prevent the creation of a fundamentalist Islamic state in the heart of Europe.
It is true that the predominantly Muslim government of Bosnia, based in Sarajevo, receives loud and occasionally practical support from Iran, among other Muslim countries. It is also true, too, that an increasing consciousness has spread among Bosnian Muslims. Pundits in Britain and the United States tell us that the Bosnian state (or what is left of it after the depredations of the ethnic cleansers, Serb and Croat) is a liberal, multiethnic, multifaith society; but although they are right about Sarajevo, in more Islamic and less accessible towns like Srebrncia or Zenica the mullahs take a stronger line. This does not justify what Karadzic's men have done in Bosnia; nothing could. But it does enable them to satisfy themselves, if nobody else, that they are defending Christian Europe against rampant Islam.
Time is not on Karadzic's side nowadays, and as I sat across a desk from him on the newly converted spare parts factory which serves as his presidential palace I had the distinct feeling he realized that too. When I said that it was the opinion in the West, as well as among his one-time friends in Moscow and Belgrade, that he was losing the war, he replied in his good but not always exact English, ''It looks like sometimes we are defeated if Muslims have initial successes on the mountains. But it's nothing: simply tactical importance but nothing strategic. Strategically we have already won this war.''
Well, maybe. But it would be truer to say that while he and his men won the earlier rounds hands down, they are now showing distinct signs of war-weariness. Bosnian Serb soldiers tell you how sick they are of the constant demands made on them, and how they would like to return to the days when life was good and Yugoslavia was still a unified republic.
''Yugo-nostalgia,'' the sophisticated elite of Belgrade and Zagreb call the feeling; I was surprised and interested to find it in the Bosnian Serb ranks as well. This may be a war no one can win, but the predominantly Muslim forces are doing better nowadays. It will take all of Pale's mind-fogging qualities to hide that particular truth from the Bosnian Serb leadership.