Next Step : Serbs’ Ghost Republic Bedevils Balkan Peace : Who rightfully rules Krajina? A tug of war over the elusive territory imperils chances for a lasting truce.

This gritty frontier town is known to many as the capital of the self-proclaimed Republic of Serbian Krajina. But few here could mark out the borders of their republic on a map, and even fewer would hazard a guess at who’s in charge on any given day.

At least three politicians claim presidential authority--each an assassination target of the others. And the only government that has won international recognition for its claim of sovereignty hasn’t dared set foot in the area for almost a year.

In fact, Krajina, an enigmatic national entity in the hands of political outlaws, defies just about every definition of civilized statehood.

Yet this long strip of Serbian-inhabited territory, stretching hundreds of miles from the Adriatic Sea to western Romania, has elbowed its way onto the world stage as the disputed land over which Serbs and Croats have gone to war.

Krajina is also envisioned as the western perimeter of a new Yugoslavia, or Greater Serbia, that Serbian President Slobodan Milosevic wants to build from the federation’s ruins to unite far-flung Serbian enclaves.

For both strategic and practical reasons, settling the dispute over who rules Krajina is vital to restoring peace in the Balkans.

And it is likely to emerge immediately as a major point of contention if and when the 12-nation European Community succeeds with its plan to sponsor negotiations over how to draw a new political map in the region that until recently was Yugoslavia.

Aside from the overlapping ethnic claims to ownership, EC negotiators will find there is wide disagreement over exactly what territory Krajina includes.

The name Krajina, which means “military frontier,” refers to the fortified boundary of the old Austro-Hungarian Empire. The border region became predominantly inhabited by Serbs who fled the 500-year Turkish occupation of their homeland. Austria gave them refuge in return for their defending the empire.

Today, Krajina Serbs lay claim to even broader swaths of the Balkans because mass migrations spawned by a succession of wars scattered Serbs into other former Austrian territories, especially Slavonia, Dalmatia and Bosnia.

When Yugoslavia was created in 1918, the former Austrian provinces with Serbian minorities were divided--Serbs say arbitrarily--among the republics of Croatia and Bosnia-Herzegovina.

Since Yugoslavia’s violent breakup, the United States and dozens of other foreign governments have recognized Croatian sovereignty over all areas it controlled as a federal republic, including most of what the Austrians called Krajina.

Krajina’s 300,000 Serbs feel otherwise and have seized their territory by force, largely thanks to backing by the Serbian-led Yugoslav People’s Army. Although ravaged by 10 months of war, Krajina is now a virtual fortress almost exclusively populated by Serbs.

EC negotiations to sort out the conflict are to begin later this spring, as soon as 14,000 U.N. peacekeeping troops are in place in Krajina and other venues of Serb-Croat conflict.

The talks are likely to thrust the EC into the unenviable role of mediator in a battle where one side’s negotiating strategy is that possession is nine-tenths of the law. Serbs already occupy one-third of Croatia--most of Krajina, Slavonia and parts of Dalmatia--and are currently embarked on a similar campaign to conquer huge areas of Bosnia-Herzegovina.

“The Serbian strategy from the start has been to take the maximum territory with the idea that they may have to give back a piece here and there, if and when negotiations ever get under way,” said a Western diplomat in Belgrade. “It’s gun-barrel diplomacy.”

EC mediators also may find their influence with Serbian authorities limited. Milosevic and his proxy warlords have so far ignored Western warnings that continued aggression against other republics threatens to make Serbia an international pariah.

Milosevic has admitted arming Krajina Serbs two years ago, effectively instigating the August, 1990, Knin revolt against Croatian rule that escalated into civil war after Croatia declared independence in June, 1991.

While the armed struggle succeeded in ousting all vestiges of Croatian President Franjo Tudjman’s regime, it has exacted its price in misery and economic destruction.

More than 600,000 residents of Krajina were forced to flee as army troops destroyed whole towns and villages. On one 15-mile stretch of road around the northern front-line city of Petrinja, formerly lined with a succession of agriculturally prosperous Croatian communities, every single dwelling has been looted and blown up.

The rampage has made Croats and Muslims here and in neighboring Bosnia fearful of any future that would legitimize Serbian rule.

“I don’t know if I can still live here,” said a sobbing Milka Habac, a 69-year-old Croatian peasant standing among ruins in the village of Maja, a few miles south of Petrinja. “I could be shot tomorrow and there would be no one around to give me a proper burial.”

Determining who owns what of Krajina’s geographic puzzle would be difficult enough if the potential heirs were limited to the rival nationalist regimes directed from Belgrade and Zagreb.

But in a Byzantine twist befitting a region infamous for intrigue, a Serbian plot to hold Krajina through local puppets has backfired and multiplied the contenders.

“No republic is going to take over Krajina,” insisted Milenko Zelenbaba, who heads the vast and heavily armed Krajina police force. “We are an independent state that will be part of Yugoslavia, not Croatia.”

Zelenbaba and others recently installed by Belgrade espouse views of Krajina’s future that fit nicely with those of Milosevic, who seeks to create a new Yugoslavia that would unite his landlocked republic with the Serbian-occupied areas of Croatia and Bosnia-Herzegovina.

But boosting the political fortunes of Milosevic is not what another of Krajina’s power brokers has in mind.

Knin Mayor Milan Babic, who until recently was Krajina’s president, is unwilling to gamble away his region’s de facto independence by joining forces with Milosevic, who has already double-crossed him once.

Babic refused to go along with the U.N. deployment, fearing its condition of demilitarizing Krajina and other Serbian-held territories could result in their reverting to Croatia.

Milosevic wanted U.N. intervention because he believes it will ensure the status quo of Serbian control over much of Croatia, including areas of Slavonia and Dalmatia as well as Krajina.

When Babic balked, Milosevic engineered his replacement with a more pliable proxy, Goran Hadzic, instigating a power struggle within Krajina.

Babic is committed only to ensuring that the historic Krajina region remains under Serbian rule. But Milosevic has draped the mantle of Krajina over coveted territories in Bosnia, Slavonia and Dalmatia, where Serbs are a minority and have no historic claims to sovereignty.

Babic, who is still popular among armed militants controlling Knin, insists that he, not Milosevic or Hadzic, will speak for Krajina at any international negotiating forum.

Risto Matkovic, a Babic lieutenant, explained that Knin people fear that Milosevic may trade away their poor, rocky region in exchange for the fertile farmland of Slavonia, in eastern Croatia.

“We will survive in any case. Krajina is economically viable,” insisted Matkovic, whose wall map of the territory peters out north of Petrinja.

Matkovic contended that Krajina has great potential as a tourist destination because of the nearby Plitvice Lakes National Park and sun-drenched Adriatic.

But because of the prevailing combat atmosphere, there have been few visitors to Krajina over the past two years. Barricades manned by heavily armed and often drunk vigilantes have been erected on all major roadways to repel Croatian attempts to put down the insurrection.

Krajina’s instability threatens the tourist industry throughout Dalmatia, which is vital to Croatia’s economic recovery. All major road and rail links to the Adriatic pass through or close to Knin, giving the locals the power to sabotage any negotiated solutions not to their liking.

The EC has not yet made clear whether Knin authorities will have a voice in the forthcoming talks. If the forum’s decisions are to have any effect, the EC may be forced to include the warlords, who could sabotage a deal they don’t like.

To include them, however, would bestow legitimacy on an aggressive, law-breaking regime, many Western diplomats and Croatian and Muslim leaders say. Those critics were annoyed earlier when, during the diplomatic offensive to get political backing for the peacekeeping mission, U.N. Undersecretary General Marrack Goulding met with both Babic and Hadzic.

Meanwhile, Muslims and Croats displaced by the Serbian takeover of Krajina, or threatened by its expansion into Bosnia, argue that the speed of Western intervention is as important as the decision on who will be invited to the talks. Some say they have lost faith that a democratic settlement can be achieved.

“They want to take us over and make us part of Serbian Krajina, and with so many guns in their hands I doubt anyone can stop them,” said a disbelieving Mina Gusic, a Slavic Muslim in Banja Luka.

“We would like to think the United Nations or the EC would have a big influence,” Gusic, a local district court judge, said worriedly as she watched Serbian gunmen patrolling her Bosnian city.

“We hope for this. We want it, but we don’t believe anyone can save us.”

Krajina’s Geographic Puzzle

Krajina is the long strip of Serb-inhabited territory that wends through what once was Yugoslavia and into Romania. But as apolitical entity, it defies definition.

The region was an administrative entity under the Austro-Hungarian Empire. Serbs today, however, insist that even other areas of Croatia and Bosnis-Herzegovina are also properly part of the Serb-controlled land.

The European Community will try to settle who controls Krajina during negotiations later this year, after 14,000 U.N. peacekeepers are in place.