NEWS ANALYSIS : Bosnian Serbs May Not Realize Their Isolation : Balkans: Observers are pessimistic that truce will last. They say rebels are both fatalistic and overconfident.

Time is clearly running against the Bosnian Serbs, Balkan analysts agree, but a bizarre mix of fatalism and overconfidence stirred up by nearly three years of steady military advances may be blinding the bellicose rebels to their fate.

A cease-fire that followed the recent peace mission of former President Jimmy Carter has silenced most guns across shattered Bosnia-Herzegovina and created breathing space for the rebels to contemplate their long-term prospects.

But few of the diplomats and peacekeeping officials seeking to wring a permanent settlement out of the combatants during the current four-month truce express much hope of brokering an end to the bloodletting.

“Their long-term military situation is not good,” U.S. special envoy Charles Thomas said of the Bosnian Serbs. “There is a gradual shift in the military balance in favor of the government.”

The heavily armed rebels are also hampered by a shortage of spare parts for the hundreds of tanks they have deployed against the Muslim-led government forces, Thomas added, and should be aware that there is a serious risk of a unilateral U.S. lifting of the international arms embargo, to aid the Bosnian leadership, now that Republicans are in control of Congress.

“But whether they realize all this is another question,” the Balkan mediator observed. “These guys are detached from the real world. They may be so carried away with (recent military victories) that they don’t realize their long-term disadvantages.”

Despite the U.N. arms embargo imposed on all the former Yugoslav republics in 1991, weapons have been pouring into Bosnia through Croatian allies for months. The influx, largely bankrolled by supportive Islamic countries, threatens to eventually shift the military advantage to the government side.

Bosnian Serbs are also feeling the bite of a fuel and ammunition shortage brought on by their feud with Serbian President Slobodan Milosevic, the architect and paymaster of their rebellion until he broke with the Bosnian Serbs in August.

Milosevic has been lobbying the United Nations to ease economic sanctions imposed on his country for fomenting the Bosnian war. When Bosnian Serb leader Radovan Karadzic spurned his advice to accept an internationally mediated peace plan, Milosevic cinched off the supply lines.

Also, despite the cease-fire, Bosnian Croats have been chipping away at the Serbs’ territorial stranglehold, taking huge swaths of land in the Dalmatian hinterland and threatening broader offensives.

“Unless political talks on a final peaceful settlement in Bosnia begin by May 1, we shall start fresh liberating activities,” Kresimir Zubak, president of Bosnia’s Muslim-Croat federation, told journalists here Sunday.

The emboldened Muslim-Croat forces and the prospects of U.S. aid to the Bosnian government should be pushing the rebels toward a more conciliatory position, the analysts argue.

But the Bosnian Serb forces directed by firebrand Gen. Ratko Mladic have indicated little fear of the future and even less willingness to compromise.

“I’ve never been more pessimistic about the prospects for a peaceful settlement,” said a senior U.N. official at headquarters here. “The Serbs have completely misinterpreted Carter’s visit as a show of support for their side.”

Western diplomats here in the Croatian capital attribute the relative success of the Carter-brokered cease-fire to an interest on the part of both the Bosnian government and the rebels in taking a break during the winter snows and preparing for a spring offensive.

“No one has any illusions that this cease-fire is going to hold once either side feels sufficiently rested and has had time to reload. It’s pure self-interest,” one Zagreb-based diplomat contended.

The reluctance by both sides to build on the cease-fire has been apparent.

The U.N. commander for Bosnia, British Lt. Gen. Michael Rose, paid a visit to Mladic on Sunday but failed to gain any credible assurances that the rebels would allow restoration of free movement for the encircled Bosnian capital of Sarajevo.

“Gen. Rose met with Mladic this morning to underscore the need to continue the momentum toward peace and to say it is now the Bosnian Serbs’ time to show good faith,” U.N. spokesman Paul Risley said.

Bosnian Serb forces have refused to allow civilian traffic to resume through the U.N.-controlled airport, linking compliance with a Bosnian government withdrawal from a demilitarized zone on strategic Mt. Igman.

U.N. patrols of the DMZ showed the government had withdrawn “except for some stragglers in one location, but not an organized military unit,” Risley said.

Still, the Serbs have refused to ease their blockade of Sarajevo and have postponed further discussion of the U.N. proposals until Wednesday, a full week after the access routes were supposed to have opened.

Diplomats with the five-nation Contact Group, including Thomas for the United States, plan a full week of shuttling among West European and Balkan capitals to push their formula for bringing peace to Bosnia by dividing its territory between the Muslim-Croat federation and the Serbs.

But the mediators concede that the prospects remain slim, even under the now-credible threat that the U.S. Congress might act to arm the underdog government and contribute tens of thousands of troops to aid a North Atlantic Treaty Organization rescue of endangered U.N. peacekeepers.

“The Bosnian Serbs overestimate their military situation. They read too much into their victories and their perception that the United States is not willing to come in,” Thomas said. “The Serbs have this fatalistic streak. They may see another defeat as inevitable. Their feeling is, ‘So what?’ ”