BALKAN ENEMY NO. 1

By Johanna McGeary

Diplomacy is often a high-stakes game of chicken. This time the showdown is between the U.S. and Serb President Slobodan Milosevic over the fate of Radovan Karadzic, Bosnia's defiant Serb leader and most-wanted war criminal. His continued authority and freedom have been galling the West ever since the Dayton peace accords promised last December that he would be dumped from power and delivered to trial. Now he stands squarely in the way of Washington's rickety peace plan to hold "free and fair" elections this September in Bosnia--elections that will allow NATO forces to declare success and go home by year's end. If the exit strategy begins to crumble, then Bill Clinton's own electoral prospects are jeopardized.

The Pentagon flatly refuses to let NATO forces hunt down and arrest Karadzic and his military sidekick General Ratko Mladic. The only alternative is to persuade Milosevic to squeeze them out. After the Swedish official charged with implementing the civilian provisions of Dayton, Carl Bildt, tried for two weeks in vain to get Milosevic going, the U.S. set to work, and Milosevic reluctantly promised late last week, following several jawboning sessions with U.S. diplomats, that "the skids are greased" for Karadzic's imminent political demise.

Well, we'll see. American officials neither accepted the half-baked deal Milosevic proposed nor believed he would deliver on it, insisting that nothing less than Karadzic's complete ouster and arrest would do. But the U.S. is desperate to find a solution that will help ease the White House out of an ugly dilemma.

Next month Western officials must certify that conditions can be met for free and fair Bosnian elections in mid-September. They patently can't, says the International Helsinki Federation. Even the Organization of Security and Cooperation in Europe (OSCE), which will oversee the vote, concluded in a private "benchmark paper" that the minimal requirements set down in Dayton do not exist; there is no freedom of movement, no freedom of expression, no freedom of association. The blame for much of that lies directly with Karadzic, who has challenged or rejected every civilian provision of the Dayton pact.

Washington bears some of the blame, however. Having delegated civilian implementation of Dayton to Bildt, the Americans have been unwilling even to imply that NATO's might stood behind the diplomat's efforts. "At least move some equipment around," said an official from Bildt's office, arguing that just a meeting between the diplomat and high NATO officials last week was enough to exact conciliatory talk from the Pale leadership.

As the deadline for certification approaches, it is suddenly urgent to get rid of Karadzic and Mladic. The problem commands the highest priority at the White House, and other Western officials share the anxiety. Richard Goldstone, chief prosecutor at the Hague tribunal, appealed in Washington for military action to apprehend the Bosnian Serb ringleaders but returned last week with no encouragement. Bildt attempted to sideline Karadzic by elevating more moderate political rivals, among them Prime Minister Rajko Kasagic. When Karadzic sacked the Prime Minister two weeks ago, Bildt labored to transform the dismissal into a real power split that would displace Karadzic, but the effort fizzled. In response, Karadzic brazenly promoted more hard-line loyalists to influential positions.

That scared the U.S. into action. John Kornblum, Assistant Secretary of State for European and Canadian Affairs, was dispatched to the region last week to lean on Milosevic, but the Serb President has his own interests to protect. Karadzic is still popular with Bosnian Serbs, and Milosevic, who is not, would only lose ground by removing him. He may have good reason not to hand Karadzic or Mladic over to the Hague, since they are among the few potential witnesses who could confirm his own complicity in war crimes. Yet Milosevic badly needs Western economic aid and diplomatic approval to revive his flattened economy. Kornblum pointedly reminded him that sanctions can be reimposed if Western powers decide he is not carrying out his commitments. His response: What if Karadzic gives up his formal duties and fades from public view?

Absolutely not good enough, says the U.S. "There was no deal," insisted an American diplomat who attended the meeting. "We would not accept something that was more water than wine." Another Washington official said, "We told Milosevic the man needs to be handed over."

But what if the U.S. loses the game of chicken and Milosevic never delivers Karadzic? Short of renewed fighting, elections will go ahead no matter what, says the head of OSCE in Bosnia, Ambassador Robert Frowick. But with Karadzic still pulling the strings, Clinton would find it increasingly difficult to explain his fear of using the 60,000 NATO troops on the ground to remove him. By the end of the week, in fact, NATO said its forces in Bosnia would be redeployed to limit Karadzic's and Mladic's movements--and therefore their ability to wield power. With his own election to think of, perhaps Clinton will finally push for the arrest of Europe's most-wanted war criminal.

--Reported by Massimo Calabresi/Pale, Ann M. Simmons/Washington and Alexandra Stiglmayer/Sarajevo

With reporting by MASSIMO CALABRESI/PALE, ANN M. SIMMONS/ WASHINGTON AND ALEXANDRA STIGLMAYER/SARAJEVO