Making Points, Not Peace, at Talks : Bosnia: Foes in the ethnic war are using the Geneva forum to push their own agendas.

Serbian rebel leader Radovan Karadzic claimed that the past week’s negotiations in Geneva came within inches of producing a peace treaty that would divide Bosnia-Herzegovina and create twin cities out of the rubble of Sarajevo.

Bosnian President Alija Izetbegovic left the talks declaring that there had been “no progress.”

The conflicting accounts of the latest diplomatic endeavor to end Bosnia’s 20-month-old bloodletting served to illustrate how the key powerbrokers have come to use the peace forum as a podium for swaying international opinion to their side of the conflict rather than as an arena for compromise that might end it.

While Izetbegovic succeeded in calling the Serbs’ bluff by agreeing to discuss the division of Sarajevo and exposing their unwillingness to cede any captured territory in exchange, the political point scored little for his besieged people.

Four more Sarajevans were killed Friday when Serbian forces who surround the capital stepped up their artillery barrage. Two people died when a shell exploded near the city’s main bakery, and two others were felled during an attack on the famous Princip Bridge, where the Serbian nationalist shooting of Austrian Archduke Franz Ferdinand in 1914 launched Europe into World War I.

Bosnian Serbs and their patrons in neighboring Serbia also emerged from the latest peace talks as losers, having forgone a chance to get U.N. sanctions against them lifted in return for minor territorial concessions demanded by the Bosnian government.

European Community leaders had offered to suspend the U.N. embargo if Karadzic agreed to withdraw from two areas, together accounting for less than 3% of the republic, where Muslims traditionally made up the overwhelming majority before Serbian nationalist gunmen subjected the regions to “ethnic cleansing.”

The talks mediated by EC negotiator Lord Owen and U.N. envoy Thorvald Stoltenberg were reconvened after a two-month hiatus in hopes that the offered reprieve from sanctions would spur the Serbs to concede the last territorial obstacles said to be in the way of a government surrender to ethnic division.

But the focus quickly shifted to Sarajevo, which Karadzic and his Belgrade backers have long envisioned as a crucial piece of the Greater Serbia they are building. The Muslim-led government, which wants the capital and what is left of Bosnia to remain integrated, had capitulated to the ethnic carve-up proposed by Karadzic and Croatian nationalist leader Mate Boban on condition that Sarajevo be placed under U.N. protection.

Bosnia’s U.N. ambassador, Mohammed Sacirbey, complained that the mediators allowed Karadzic to set the agenda but said the government had conceded to discuss the “repugnant” notion of dividing Sarajevo in hopes of ending the war and avoiding more civilian casualties.

Conference sources said the government offered to exchange the encircled towns of Srebrenica and Zepa for two key industrial suburbs held by the Serbs in northern Sarajevo but that Karadzic rejected the trade.

Izetbegovic returned to the ravaged Bosnian capital in a defiant mood Friday, vowing never to give up the parts of Sarajevo still under his control.

“No matter what the final outcome, we will not withdraw from any parts of the town that we are now holding. I would like both our citizens and our fighters to hear that,” the Muslim president announced upon return from Geneva.

Karadzic insisted that his talks with Izetbegovic had come close to achieving a negotiated solution, including the division of Sarajevo. He accused the Bosnian president of trying to make the Serbian side appear intransigent.

The mediators held out some hope that talks will resume soon. But their assessments of the past week’s negotiating fits and starts that ended in impasse indicated little expectation of a breakthrough.

“There have been no conclusions,” Stoltenberg said. “The parties, as usual, hold their cards as long as possible.”

Times special correspondent Laura Silber, in Geneva, contributed to this report.