NEWS ANALYSIS : Belgrade’s Feud With Bosnia Serbs Familiar to Croatians : Balkans: Milosevic used same tack there two years ago. Some worry dream of national unity is unraveling.

In this rocky Dalmatian hinterland where the war for Greater Serbia began three summers ago, the first rebels to dare challenge the word of Serbian President Slobodan Milosevic are experiencing deja vu .

Milosevic’s faraway but high-profile power struggle with his Bosnian Serb proxy, Radovan Karadzic, replays a feud he choreographed with Croatian Serbs in early 1992, when the insurgents here refused to sign a U.N.-mediated cease-fire and peacekeeping plan after conquering a third of Croatia.

That showdown ended with the ouster of Croatian Serb warlord Milan Babic and acceptance of the vaunted Vance Plan, which the international community expected would restore peace to the Balkans.

Yet more than two years after Babic’s ostensible sacking, he remains the political force to be dealt with here. The seized territory remains firmly in the hands of the rebels, who have proclaimed it the independent Republic of Serbian Krajina. And the prospects for peaceful re-integration of Serbs into Croatia appear to be practically nonexistent.

The current dust-up between Milosevic and Karadzic, which has cut the supply lines to Bosnian Serbs, may be a similar piece of short-run theater staged for the benefit of the outside world.

But whether the split between Belgrade and Karadzic’s leadership in the Bosnian Serb stronghold of Pale is real or not, it has Serbs across the Balkans privately worried that their cherished goal of national unity is coming unraveled.

On what seemed the verge of victory in the war for an expanded state in which all Balkan Serbs would live, some of the rebels have begun to fear that Milosevic is willing to sell them out on the very principle their fathers, sons and brothers fought and died for.

The people of this farthest outpost in the overextended Serbian empire are particularly unsettled by Milosevic’s cutoff of support for Bosnian Serbs on both material and moral grounds.

The economic blockade that Milosevic has imposed on the Bosnian Serbs has also shut the supply line between Belgrade and Krajina, because most goods bound for the Croatian Serb rebels must travel through Bosnia-Herzegovina first.

Even more disturbing, in the view of Krajina Serbs, is the apparent willingness of their mentor to capitulate to a partition plan that compromises on the goal of unifying all Serbs. By accepting a five-nation peace plan, Milosevic is in effect settling for a Greater Serbia that does not include the Krajina.

Few here will give voice to their worst fears after more than three years of isolation, deprivation and deadly fighting. But there is a creeping realization among some Krajina Serbs that they may have outlived their usefulness to Milosevic once they fought his battles for him and seized territory that he apparently intends to trade away.

Young Serbs like 17-year-old Alexander Muzdalo, about to enter the Krajina army, are worried that the dream of unity they have been raised on is about to collapse in Serb-versus-Serb infighting.

“This could cause problems,” the youth with close-cropped hair said as he brooded over the break between Milosevic and his Bosnian proxies. “It could cause a division of the Serbs and destroy what we have fought for.”

That the Krajina leadership is worried about being left out of Greater Serbia is evident in its failure, for the first time since the war began, to tell its people what they should think. Television and radio broadcasts first sent out mixed signals about which faction Krajina sides with and then went virtually silent on the spat, apparently unable to figure out where they stood.

Milosevic has control of the media in Serbia, allowing him to cast the cutoff of Bosnian proxies as justified punishment of uncompromising extremists who are putting all Serbian war gains at risk by refusing to sign the peace plan proposed by the United States, Russia, Britain, France and Germany.

The Serbian president has also taken control of the television service beamed to Serbs in Bosnia, but the message disseminated loudly and clearly by the Pale leadership before the broadcasts were hijacked was strong enough to sway most Bosnian Serbs to parrot the rejectionist views of Karadzic.

But in Krajina, the Belgrade-Pale standoff has generated a further split.

Babic, who now carries the title of Krajina foreign minister and controls the rogue state’s assembly, last week produced a parliamentary declaration in support of Karadzic, while self-styled Krajina President Milan Martic reaffirmed his allegiance to Belgrade.

That the 250,000 Serbs living in Krajina are confused and fearful is little wonder, and they are finding no guidance from the top.

“No one in the RSK (Krajina) leadership is saying anything to us, because they themselves don’t know what to think,” said a Serbian secretary with close ties to the inner circle. “No one even wants to think about what it would mean if we start creating divisions among ourselves.”

Babic twice scheduled interviews with visiting Western reporters earlier this month, then failed to show up for them, in the end sending two deputies who refused to discuss the inter-Serbian conflict.

The official line so far has been to maintain a policy of bravado, sometimes insisting the split is a clever charade for Western consumption while at other times claiming it would have no effect on the goal of Serbian unity even if it was a genuine breach.

“War for us is nothing. It’s normal now after so long. So if we have this same war tomorrow, we don’t care. We are not afraid of anything,” insisted Mladen Kalapac, the Krajina government’s liaison with the U.N. Protection Force.

U.N. officials and Western diplomats throughout the former Yugoslav federation generally concur that Milosevic has so far stuck to his vow to cut off the intransigent Bosnian Serb rebels in hopes of engineering a change in the Pale leadership that would deliver a “yes” vote on the international peace plan.

The observers also tend to agree that the de facto blockade against Krajina Serbs should be pressuring the Knin authorities to ease their stubborn refusal to consider any form of re-integration into Croatia.

But the demonstrable actions to bring his renegade proxies to heel fly in the face of Milosevic’s longstanding promise to create an expanded nation in which all Serbs would live.

The pundits and analysts watching from the sidelines this time admit they are uncertain what the Serbian president is up to, and they concede he has a brilliant track record for escaping scot-free from diplomatic dead ends.

“Nobody has bought what he is selling yet,” one Zagreb-based diplomat said of Milosevic’s apparent break with the Bosnian Serbs. “He has the problem of the kid who cried wolf.”

A senior U.N. civilian official here in Knin believes Milosevic is simply gambling that he can get some relief from sanctions before his ploy against Karadzic causes any permanent damage to the cause of unity or undermines his grip on power.

“He might oust Karadzic. But that doesn’t mean he will give up on the Bosnian Serbs. Milosevic’s whole political career is based on being the leader of all the Serbs,” the official said. “The blockade is probably aimed at getting sanctions lifted or maybe just to buy some time.”

The experience of Babic and the Krajina Serbs provides a telling example of how Milosevic in the past has successfully maneuvered to evade threatened force or tighter sanctions without abandoning the goal of unifying the Serbs.

On the streets of Knin and throughout Krajina, people are unsure what to make of the latest conflict. But every fighter, farmer and housewife asked to name the Serbs’ greatest leader still recites the name of Milosevic without a flicker of doubt.