NEWS ANALYSIS : New Violence Could Ignite Croatian Tinderbox : Balkans: Serbs are using seized land to attack Bosnia. Their success could complete dream of a Greater Serbia.

In a provocative move that could ignite an all-against-all bloodletting in the Balkans, rebel Serbs who seized one-third of Croatia three years ago are now using that occupied territory as the staging ground for air and artillery assaults on neighboring Bosnia-Herzegovina.

The Croatian Serbs, in league with Bosnian Serbs, have armed and mobilized a renegade Muslim refugee force in a chilling campaign to conquer Bosnia’s Bihac pocket, which would uproot another 200,000 Muslims and make Greater Serbia a virtual fait accompli.

International aid agencies have condemned the Croatian Serbs’ conscription of 5,000 Muslim males from refugee camps in Serb-occupied Croatia, and peacekeeping officials warn that air attacks launched Friday and the involvement of those highly manipulated Bosnian refugees could spur the Croatian government army to move in.

Zagreb officials fear that the fall of Bihac, in northwestern Bosnia, would unleash another destabilizing flood of refugees into this war-impoverished country, so they have been arming for a deadly rematch with the rebel Serbs who are now creating international havoc from within the occupied Krajina region.

Cautioned by Washington and Western Europe to hold fire in an offensive that could easily flare into a conflagration, Zagreb has appealed to the U.N. Protection Force to avert this predictable disaster.

But Croatian nationalists who have been itching for such a pretext to strike back at the Krajina Serbs and recover their territory appear to be counting on the United Nations to retreat behind its mission’s toothless mandate.

Croatian Defense Minister Gojko Susak, an ardent nationalist, warned at the onset of the Krajina Serb encroachment on Bosnia that his army would “respond” unless the provocations ceased.

Even Mate Granic, the moderate foreign minister, hinted at a military reaction in a letter to the U.N. Security Council earlier this month that made clear that the Croatian government would “under no circumstances be able to cope” with the consequences of a vanquished Bihac pocket.

“The Krajina Serbs are courting having their fate decided by a military solution, instead of a diplomatic one,” a senior Western diplomat warned as rebel Serb attacks intensified against Bihac.

Western mediators trying to re-integrate Krajina Serbs into the rest of Croatia claimed a small breakthrough on several economic issues this last week.

But the rebel Serbs’ sincerity was called into question by their firing of SA-2 missiles into the Bihac pocket, even as their negotiators were saying at the long-stalled peace talks that they could be flexible.

On Friday, only two days after the purported diplomatic advance, Krajina Serbs launched a second aerial bombardment of Bihac in little more than a week, prompting a fresh threat of air strikes from the U.N. Protection Force.

The bombing sorties have been conducted from the Udbina air base in Serb-held Croatia, about 18 miles southwest of Bihac.

“We are concerned about this spinning out of control,” Madeleine Albright, U.S. ambassador to the United Nations, said of the Croatian Serb actions after a Security Council meeting Thursday.

Thorvald Stoltenberg, the former Norwegian foreign minister now serving as chief U.N. negotiator for the Balkan crisis, said he and other mediators made an issue of the rebel attacks on Bihac during the latest talks.

“The Serbs denied that they had sent in forces (to Bosnia) and said they had not been attacking from their areas,” Stoltenberg said, adding that the U.N. mission and the diplomatic community had significant evidence to the contrary.

Krajina rebels a week earlier launched an air attack against Bihac with warplanes that took off from an airfield near the rebel Serb stronghold of Knin in southern Croatia.

Of the gravest concern to the U.N. Protection Force and foreign aid agencies trying to assist the war’s millions of victims has been the conscription of the Muslim followers of defeated warlord Fikret Abdic.

A black-market kingpin with a criminal past, Abdic has been inciting insurgency against the Bosnian government through a radio station he operates from his haven in Croatian Serb territory. He has also persuaded the 30,000 Muslims who followed him when he fled Bihac in August that they will be slaughtered if they take up a U.N.-backed Bosnian government offer of amnesty for having taken up arms against their country’s military.

Together with his Krajina Serb collaborators, Abdic has rearmed 5,000 fighting-age males from among his followers for another try at conquering the Bihac pocket.

“This is a clear breach of international law,” protested Robyn Thompson, spokeswoman for the International Committee of the Red Cross, referring to the mobilization of refugees for armed combat.

An official of the Office of the U.N. High Commissioner for Refugees, which had been feeding and sheltering the Abdic followers at two camps in Serb-held territory, condemned the mobilization as “utterly abhorrent to the whole idea of what refuge is about.”

Because the rebel Serbs have been staging the Bihac attacks from occupied territory in Croatia, Bosnian government officials have appealed to the nominally allied Croats to intervene militarily to “take all necessary steps” to eradicate the insurgency nests.

Granic warned the Security Council that Croatia was finding it “extremely difficult” to fend off the Bosnian appeals for help and to continue counting on the powerless U.N. peacekeeping force to resolve the crisis.

“Clearly, there is the danger that the military conflict in the Bihac area could spill over into Croatian territory,” U.N. mission spokesman Michael Williams said of the risk of Croatian army action.

But Williams said the U.N. peacekeepers were powerless to do more than express their concern over the recent attacks on Bihac because the mission has no mandate to prevent hostile actions from Croatian territory and the NATO “no fly” zone only extends to Bosnia, not Serb-held areas of this country.

If the Serbs succeed in taking most of the Bihac pocket, leaving some token fiefdom for Abdic and his pliant followers--Western diplomats describe them as “brainwashed”--the Balkan Serbs will have effectively united all of the territory they have conquered in Bosnia and Croatia.

That solid expanse of heavily armed Serbian territory would make it impossible for Serbian President Slobodan Milosevic to refuse annexation into a Greater Serbia and would likely deal political and military setbacks of such proportions to both Bosnia and Croatia that moderates in their governments would be defeated and more radically nationalist elements would seize power.

With continued attacks on Bihac, analysts see a serious risk of Croats resuming their war with Serbs in Croatia, Muslims and Croats fighting Serbs throughout Bosnia, Muslims fighting Muslims in the Bihac pocket, and the hardships and disruptions of war eventually wearing down the fragile Muslim-Croat alliance and returning those recently reconciled communities to a new phase of war.

In the increasingly likely scenario of a rekindled clash in Croatia, the stakes this time are exponentially higher than when Serbs and Croats wrestled over the wreckage of the former Yugoslav federation in 1991.

The Croatian army, despite a U.N. weapons embargo against all former Yugoslav republics, has been on an arms acquisition binge since agreeing three years ago to a cease-fire and the 14,000-strong U.N. peacekeeping deployment.

With its growing arsenal of MIG jet fighters, French-made Leopard tanks and sophisticated missile systems, the Croats now equal or exceed the killing capacity of the Serbian rebels who had a huge arms advantage in the 1991 war by virtue of having been supplied by the Yugoslav People’s Army.

All that restrains Croatia from a counterattack on Krajina is the whispered warning from supportive Western governments that a resort to violence could lead to its exclusion from the alliances and international financial circles vital to economic recovery.

But sage advice and longer-term interests are receding from Zagreb’s view with each advance by Krajina rebels, their Bosnian Serb brothers and the Abdic conscripts toward the vulnerable Bihac pocket and the goal of creating a Greater Serbia the world would have no choice but to live with.