IN a musty, cavernous bomb shelter 60 feet below Zagreb's old town, Ante Pavelic's history at its basest is busily at work.
Pavelic, Croatia's World War II-era fascist leader, built the gargantuan shelter in 1943 and 1944. At the same time, he executed tens of thousands of Serbs, Jews, and Gypsies throughout the former Yugoslavia.
Going a step further than his mentor, Adolf Hitler, Pavelic's troops, known as Ustasha, forced thousands of Orthodox Christian Serbs in Croatia's western ''Krajina'' region to convert to Roman Catholicism at gunpoint.
Fifty years later, 100,000 Croatian government soldiers and 50,000 rebel Serbs in the Krajina are poised to kill each other and ignite full-scale war across the region. The Krajina Serbs, fearing they will face at worst subjugation and at best discrimination, refuse to live in an independent Croatia. Croats, meanwhile, bitterly accused Serbs of seizing their land in 1991.
''I hope there is no war, but with the Serbs you never know what to expect,'' says Vera Grivicic, a civil defense worker in the Pavelic-built shelter. ''I don't really trust them.''
Last-minute peace talks between the Krajina Serbs and the Croatian government began yesterday in Geneva, and peace or the worst fighting since World War II hangs in the balance. ''The talks could be a breakthrough,'' says a senior Croatian diplomat. ''But if not, all bets are off.''
Fearing all-out war, major airlines across Europe yesterday canceled all flights to Croatia. Civil defense officials in Zagreb are preparing the population for possible attacks.
Following the Croatian Army seizure of a 200-square-mile Krajina Serb pocket on May 1, Krajina Serbs fired cluster-bomb equipped rockets at Zagreb. Six civilians were killed and hundreds wounded. Residents here still bitterly condemn the attacks.
Croatia tightened the diplomatic and military screws on the Krajina Serbs Wednesday and Thursday. Croatian officials demanded the immediate reintegration of all Serb-held areas into Croatia as Croat forces shelled the approaches to the Serb self-declared capital of Knin. ''Your time has almost expired,'' Croatian government official Petar Pasic said in an open letter to the residents of Knin.
Mr. Pasic called on Serbs to submit to Croat rule and warned that Serbs there may soon face the same fate as Muslim refugees from recently overrun United Nations ''safe areas'' in Srebrenica and Zepa in neighboring Bosnia.
He also pointed to the plight of 6,000 Serbs chased from the towns of Grahovo and Glamoc in neighboring Bosnia last Friday. In a flanking operation that left Knin almost surrounded, 10,000 Croatian Army troops and dozens of tanks stormed across the border into Bosnia and quickly took the two strategic towns, blocking the main supply and escape route to and from Knin.
''Don't you see the suffering of your brothers from Glamoc and Grahovo?'' Pasic asked. ''Turn your back on [your] leaders ... who are pushing you toward suffering and hell.''
But Krajina Serb leaders, who Western diplomats criticize for failing to accept a peace plan that would have allowed them substantial self-government, said Wednesday they cannot negotiate while under such intense Croatian military pressure.
THE heavily armed Croatian Army, which has flouted a UN arms embargo against the former Yugoslavia with US and German backing, has twice as many troops as the Krajina Serb army. Barring a complete Krajina Serb capitulation during the talks, Western diplomats expect fighting that could leave thousands dead and turn the Krajina's 200,000 Serbs into refugees.
''I'm not very optimistic at all. The behavior of the [Krajina Serb leadership] suggests they're trying to commit collective suicide,'' says a senior Western diplomat. ''The unfortunate thing is that the people in the Krajina are likely to be the victims of their leaders.''
The fact that much has changed since World War II seems to be lost on both sides. Memories of the fighting that followed Croatia's 1991 declaration of independence are still strong. Over 10,000 people died in a war that left the Krajina Serbs in control of 30 percent of the country.
''Of course we will win, we didn't start the war. The Serbs attacked us. They are taking our land. We must win,'' says Ms. Grivicic in the bomb shelter built by Pavelic. Just over her shoulder, the bright logo of a recent ''Under City Rave'' dance party was spraypainted on the wall, highlighting that Zagreb has enjoyed three years of relative peace.
Thanks to memories of Pavelic and Serb nationalist propaganda, few Krajina Serbs are expected to stay in the Krajina if the Croatian Army takes it as expected. The departure of 200,000 members of a single ethnic group would be one of the largest ''ethnic cleansing'' incidents of the war.
Giving a tacit green light for a Croatian attack, White House officials urged Croatia to minimize civilian casualties in the operation Wednesday. Only Stephanie, a clerk in a stylish ''Stefanel'' clothing store near the bomb shelter, seemed to sense the brutality of the potential war. ''Every night, I get down on my knees,'' she says, grasping her hands together, ''and pray that it won't happen.''