THE regimes of Serbian President Slobodan Milosevic and his Croatian counterpart, Franjo Tudjman, signed an accord last week in Geneva that is likely to bring a fundamental shift in the dynamics of the bloody Yugoslav crisis.
And in what may be another policy misfire, the United Nations seems to have inadvertently helped Serbia and Croatia team up against Bosnia-Herzegovina's Muslims.
The pact, touted as a start toward normalization of relations, calls for ``representative offices'' in each other's capitals and the reopening of rail, road, and communications links closed since mid-1991. A similar agreement was signed between the proxy leaders that Mr. Milosevic and Mr. Tudjman are sponsoring in war-torn Bosnia.
The accord freezes the Serb-Croat feud over the Krajina region of Croatia, conquered by the Yugoslav Army-backed Serbian rebels in 1991, and allows them and their proxies to concentrate on their battles with the Muslim-led Bosnian government.
``We have always said that Serbo-Croat relations are the key to the Yugoslav crisis,'' says a senior official of Serbia's ruling Socialist Party, speaking on condition of anonymity. ``Since both of us have problems with the Muslims, it is very normal to want to neutralize them.'' The new accords, he says ``will influence the position of the Muslims, because we hope they will see there is no more ground for war.''
The Muslim-led Bosnian government denounced the accords as a new attempt to force it to accede to the three-way partition of Bosnia, which it again refused to accept at last week's talks.
Subsequent statements by Serbian and Croatian officials not only sustain the Bosnian government's charges, but show that the idea behind the move came from the international community.
Since the 1991 war, Milosevic-backed minority Serbs have held a self-declared state of Krajina on almost one-third of Croatia. They plan to join with Bosnian brethren and the rump Yugoslav union of Serbia and Montenegro in a ``Greater Serbia.''
Tudjman has vowed never to concede the Krajina, and a near-war situation has persisted, broken by constant breaches of a cease-fire.
First step advocated
As a first step toward a settlement, UN negotiators, including special envoy Thorvald Stoltenberg, have advocated the reopening of economic and communications links between Zagreb, Belgrade, and the Krajina.
In August, that idea of creating a ``modus vivendi'' was added to the conditions the Serbs must meet for ending the UN sanctions against rump Yugoslavia.
That is what the new Belgrade-Zagreb pact is intended to achieve. By accepting it, Tudjman helps Milosevic meet an important condition for ending the sanctions.
``Everything in life involves interests,'' explains Djordje Bjegovic, the self-styled Krajina prime minister, in an interview in his office in the rebel Serb stronghold of Knin in southern Croatia. ``There are different ways to realize those interests.''
He says the sides will soon reopen telephone links and lines for electricity, of which Croatia is desperately short and Serbia has in abundance. He says talks have also been held on reopening a pipeline that shunts oil from the Croatian port of Rijeka to gasoline-starved Serbia.
Asked if that would violate the UN oil embargo on Belgrade, Mr. Bjegovic replied that Zagreb will present the issue to the UN as ``a humanitarian question.''
More important, the new pact will allow Belgrade and Zagreb to apply new military pressure on the Bosnian government to sign the peace deal proposed by Mr. Stoltenberg and his co-mediator, David Owen.
With Krajina on hold, Croatia can now divert precious resources from Krajina to central Bosnia, where the Croatian Defense Council, or HVO, is desperately fighting to save its few remaining strongholds.
Milena Tanjga, the self-styled Krajina information minister, says that Tudjman will eventually have to concede Krajina to the Serbs in return for their agreement not to take advantage of his dilemma in Bosnia.
``The price for the existence of the Croats in Bosnia is the price for the existence of the Serbs in Krajina,'' she says.
UN officials say they believe that Tudjman will boost substantially the involvement of regular Croatian Army troops in Bosnia.
A senior UN military commander, speaking on condition of anonymity, says he also expects an increase in the military cooperation the Bosnian Serbs began providing to the HVO after the Bosnian Croats broke an alliance last spring with Sarajevo.
That assistance may already be under way. The UN commander says a two-week-old Bosnian Serb offensive on the Muslim-held northeastern town of Olovo may well be intended to divert Bosnian forces away from central Bosnia.
A major threat to the new Milosevic-Tudjman arrangement is Milan Babic, the mayor of Knin and the leader of the 1991 Serbian uprising in Croatia.
A hard-line opponent of any cooperation with Zagreb, Mr. Babic easily won the first round of elections for a new ``president'' of Krajina in December, out-distancing self-styled defense minister Milan Martic, who openly brags of being ``a puppet of Milosevic.''
Milosevic has provided substantial support to Mr. Martic in hopes that he will win the second round of polls held on Sunday. Most observers, however, favor Babic.
There appears little chance that the deadlock over Krajina will be resolved peacefully once the dispute is taken out of the deep freeze.
Fight over Krajina
Tudjman insists that Krajina will remain part of Croatia. He portrays the new pact as proof that Milosevic is preparing to recognize Croatia within the borders it had before it seceded from former Yugoslavia in July 1991.
Belgrade insists that despite the apparent rapprochement with Zagreb, it intends to press on with its drive to incorporate Krajina into a ``Greater Serbia.''