Belgrade to Cut Off Assistance to Bosnian Serbs : Balkans: Embargo in response to peace plan rejection could stem flow of fuel and arms.

Serb-led Yugoslavia said Thursday it will cut off all assistance to the Bosnian Serbs except humanitarian supplies in a swift and stinging response to their rejection of the U.N.-brokered peace plan for Bosnia-Herzegovina.

If implemented, the embargo could stem the flow of arms and fuel that has sustained the Bosnian Serb fighters through 13 months of war against the republic’s Muslims and Croats.

The announcement implied that Bosnian Serb leaders would be made to leave Belgrade, where Serbia said they are living in comfort while their people suffer.

In Bosnia, meanwhile, Bosnian Serb troops advanced on the eastern Muslim enclave of Zepa. Sarajevo Radio said at least 130 civilians were killed when Serb troops broke through a defense line on the town’s western side.

Belgrade’s move--the strongest action yet in its recent turn away from the Bosnian Serbs--came hours after the self-styled Bosnian Serb parliament defied pleas by Serbian President Slobodan Milosevic and other Yugoslav leaders to accept the U.N.-sponsored plan to end the war.

“Aid to the Bosnian Serb republic should in future be reduced to just food and medicines in quantities to be established by the competent ministries,” a Serbian government statement said.

The Yugoslav federal government issued a similar decree.

Yugoslavia, consisting of Serbia and its tiny ally Montenegro, has been brought to the brink of economic collapse by 12 months of U.N. sanctions imposed for its perceived support for the Bosnian Serb army.

With the U.N. embargo tightened last week to a virtual blockade, Milosevic has turned from purported paymaster to peacemaker, and he stormed away from the Bosnian Serb assembly in anger after Thursday’s dawn vote.

The bitterly worded Serbian government statement criticized the vote, couched in a decision to put the peace plan to a Bosnian Serb referendum May 15-16, as irresponsible and said the “economic bleeding” of Serbia had become intolerable.

Bosnian Serbs had discounted Western expectations that Milosevic would decide to cut the flow of their vital supplies. They said the Serbian leader would face almost insurmountable opposition from his ultranationalist backers if he tried that.

There was no immediate reaction from Bosnian Serb leader Radovan Karadzic, who said earlier in the day that U.S.-led intervention in former Yugoslavia would mean more bloodshed.

Karadzic, pressured by friend and foe into signing the peace plan in Athens last Sunday, had threatened to resign if his assembly did not ratify his signature. He dropped that pledge after delegates voted 51-2 to detour the plan to a referendum.

Bosnian Serbs have opposed the peace plan because it gives them patchwork territories instead of contiguous ones. They also complain that the plan, which divides Bosnia into 10 provinces largely along ethnic lines, gives Serbs only 43% of the republic’s territory. They now control about 70%.

Heavy attacks were reported Thursday around Zepa, one of only two Muslim military strongholds left in eastern Bosnia. Its capture would bring Bosnia’s Serbs closer to their goal of completely clearing the region and uniting it with Serbia, the dominant state in what is left of Yugoslavia.

Sarajevo Radio said at least 130 civilians were killed when Serb troops broke through a defense line on the town’s western side. “Right now a massacre is taking place in Zepa,” it said.

Meanwhile in Zagreb, Croatian President Franjo Tudjman, emboldened by signs of Serb disarray, predicted Thursday that his country soon “will be completely free of Serb barbarians” who have occupied parts of the republic’s territory. And a top U.N. official there warned that the region is “entering a period of very great danger” with risks of wider conflict.