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Bosnia-Herzegovina was headed toward civil war yesterday, UPI reported from Sarajevo. Ethnic combatants swallowed the capital in machine-gun and rocket fire, and gunmen opened fire on thousands of peace demonstrators. Shooting had broken out around the capital Sunday followed by a battle for control of Sarajevo's airport. There were skirmishes at several Yugoslav army barracks and burning gasoline storage tanks and other fires could be seen around the city. A spokesman for the republic's Interior Ministr y, controlled by Croats and Muslims after the defection of Serbs, said over Sarajevo radio that armed Serbian units have been infiltrated into the city "to create chaos." ... Azerbaijan's prime minister, Hassan Hassanov, has been relieved of his post in an apparent power struggle in the former Soviet republic, Interfax news agency said yesterday. He will be replaced by his deputy, Feirus Mustafaev.... Albania's Democratic Party tapped its chairman, Sali Berisha, to be the nominee for president after lengthy

wrangling in the top echelons, party sources said yesterday. Berisha is to succeed longtime communist Ramiz Alia, who announced his resignation as president last week after the Democrats won parliamentary elections.... Italy's ruling four-party coalition could lose its parliamentary majority in general elections that ended yesterday, according to an exit poll conducted for state television. MIDDLE EAST

Israel increased by fourfold the number of housing starts for Jewish settlers in the occupied territories during 1991, according to official figures quoted yesterday in the Jerusalem Post daily.... Persian Gulf area bankers called on their governments during the weekend to fulfill a 10-year-old commitment to permit foreign banks to operate in the area, saying it is crucial to keeping the region's economy competitive worldwide. Of the six GCC members, only Saudi Arabia and Kuwait do not permit foreign or other GCC bank branches.... The UN may allow Iraq to use any export outlet, and not just a pipeline to Turkey as now agreed, but will not budge on the key terms under which Baghdad could resume limited oil sales, the newsletter Middle East Economic Survey reported in its latest issue. AFRICA

The African National Congress declined detailed comment yesterday on a report that its president, Nelson Mandela, and his wife Winnie were to separate.... A national conference aimed at introducing a multiparty democracy in the central African country of Zaire resumed its deliberations yesterday after a three-month break, French RFI radio reported.... The Angolan rebel movement UNITA attacked and destroyed a police headquarters in the country's southwestern province of Benguela, seriously violating a cea se-fire agreement, the Angolan national radio reported yesterday.

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