Yugoslav Army Halts Withdrawal From Croatia : Balkans: Breach of U.N. plan for peace may foretell more aggressive expansionism by Serbian nationalists.

The Serb-controlled Yugoslav army declared Thursday that it is halting its withdrawal from eastern Croatia, breaching a U.N. peacekeeping plan and setting the stage for another escalation of the Serb-Croat war.

Serbian rebels in Croatia’s Krajina region proclaimed a “state of war” around the city of Benkovac, near the Adriatic coast, and the Serbian political leader in Bosnia-Herzegovina ordered mobilization of all adult Serbs, including women.

The simultaneous moves, announced separately, signaled an intensification of the Serbian forces’ creeping takeover of vast areas of the strife-torn Balkans.

They may also foretell a go-for-broke campaign by Serbian nationalists to conquer as much former Yugoslav territory as possible before Western governments act to contain Serbian expansionism.

After nearly a year of conflict, Serbian guerrillas and the federal army have seized one-third of the republic of Croatia and at least two-thirds of Bosnia-Herzegovina. Both states declared independence last year and have recently been recognized by Western nations.

Alleging renewed attacks by Croatian national guardsmen, the commander of the 1st Military District in Belgrade said the army has decided “to halt the plan to withdraw and undertake measures to defend the territory, population and (federal army) forces” in the U.N.-protected area of eastern Croatia known as Sector E.

The army’s refusal to pull out of Sector E could inflict a decisive blow to the faltering U.N. peacekeeping mission in the region.

It is also likely to stir further Western denunciations of Serbian strongman Slobodan Milosevic, whose hard-line nationalist regime is accused of masterminding the bloody conflict that has taken at least 12,000 lives since last June.

The United States and Western European countries have withdrawn their ambassadors from Belgrade and threatened to isolate Serbia if it fails to stop the aggression against breakaway republics of the old Yugoslav federation. But neither Serbia nor the Serb-run federal leadership has bowed to the mounting Western pressure. On the contrary, Yugoslav Foreign Minister Vladislav Jovanovic accused foreign governments of acting on “assumptions, not proof” that Serbia is to blame.

U.N. special envoy Cyrus R. Vance won assurances from Serbia and the army late last year that federal troops would be pulled out of Croatia once a U.N. peacekeeping force was deployed.

U.N. officials announced last week that the “blue helmets” were up to full strength in Sector E--one of three U.N.-protected areas--and would take over security and access to the area from Serbian forces this week.

The wording of Thursday’s military statement suggested that federal troops expect to be engaged in renewed fighting in eastern Croatia, since it alluded to the need to protect the Serbian population.

However, Western diplomats in Belgrade contend that the U.N. deployment in eastern Croatia has worked almost exclusively in the Serbs’ interest, because it has protected them from retaliatory incursion by Croatian national guardsmen but has done nothing to allow non-Serb refugees to return to the homes from which they have been driven since armed conflicts flared last summer.

During nearly a year of army occupation, the once-multiethnic region of eastern Croatia has been cleared of non-Serbs and resettled with at least 20,000 Serbian refugees from other areas of Croatia.

U.N. officials had been complaining to Belgrade authorities over the past few weeks that forced expulsions were continuing, in violation of the Vance plan. One senior Western diplomat said that U.N. forces had witnessed the eviction of 140 Croats, Slovaks, Hungarians and other non-Serbs in a single night this week.

“There is a great potential for renewed fighting to erupt, as pressure will mount on the Croatian government if nothing is done to fulfill other objectives of the Vance plan,” one senior envoy predicted. “So far the deployment has served only to protect the Serbian minority there, but the plan also calls for returning of displaced people and demilitarization of the zones.”

The army statement, distributed by the Belgrade-based Tanjug news agency, contended that Croatian forces had “on several occasions opened artillery fire on units of the Yugoslav People’s Army in Baranja and West Srem.”

Neither Serbian authorities nor the federal military brass ever refer to areas now patrolled by the United Nations as being within independent Croatia. They call the seized territory in eastern Croatia the Serbian Autonomous Region of Slavonia, Baranja and West Srem, and other land occupied in Croatia has been renamed the Republic of Serbian Krajina.

Frequent violations of a Jan. 3 cease-fire have been reported by both Serbian and Croatian forces in eastern Croatia, especially around the embattled city of Osijek, still nominally under Croatian control.

Serbian and federal military leaders had been pressing for expansion of the U.N.-protected areas to include other Croatian territory where Serbs are a minority, but the Croatian leadership in Zagreb had rejected the idea for fear that those areas, too, would be lost to Serbian control.

The announcement that the army will remain in Sector E coincided with other hints that Serbs will not quickly cede control of the areas they hold in Croatia and Bosnia to the foreign mediators.

The Serb-run Tanjug news agency asserted that Serbian forces were under attack in Benkovac, near the Adriatic coast, declaring a “state of war” that will require a continued military presence there.

At the same time, Radovan Karadzic, the leader of ethnic Serbs in Bosnia-Herzegovina, ordered all men from age 18 to 60 and all women between 18 and 55 to report to local militias to defend their locales against an imminent assault by Muslims and Croats.

Serbs account for about 31% of Bosnia’s 4.4 million people but now control more than two-thirds of the republic’s territory. Their armed uprising against independence, supported by the army and Serbs from Belgrade-based militias, has driven 700,000 people from their homes in Bosnia, most of them Muslims.

Last year’s war in Croatia displaced another 600,000, bringing the number of homeless from the Yugoslav war to well over 1.3 million.

The refugees have become a concern among nearby countries and republics forced to take them in. And they have been subjected to hostage-taking and other acts of terrorism as the war disintegrates into a level of barbarism unseen in Europe since the Nazi era.