NEWS ANALYSIS : V-E Day No Cause for Celebration in War-Torn Bosnia : Balkans: The latest fighting kills four people, offering a reminder that peace still eludes Europe.

As much of the world on Monday celebrated the end of a horrific war half a century ago, fighting raged on in the Balkans, reminding those who cared to notice that real peace in all of Europe is as distant and unlikely as ever.

In the latest, fierce escalation, Bosnian Serbs on Monday shelled the U.N.-designated “safe area” of Tuzla in northern Bosnia-Herzegovina, reportedly killing four. And on Sunday, 10 soldiers and civilians were killed when shells hit a government-held suburb of Sarajevo near a tunnel that is the city’s lifeline.

It was the deadliest attack on the besieged capital in more than a year and was followed later Sunday and on Monday night by heavy mortar and machine-gun fire.

With such ethnic warfare tearing at the middle of Europe, Bosnia looked at Monday’s celebrations with bitter cynicism.

“People all over Europe and the world are celebrating the victory over fascism,” Bosnian Prime Minister Haris Silajdzic told reporters shortly after the shelling. “This is proof: Fascism is not dead.”

Some Sarajevans, whose city has been surrounded by rebel Bosnian Serbs since 1992, found it ironic that the rest of Europe was praying for peace and watching parades while they, for the umpteenth time, cowered or sought cover from falling rockets and sniper fire. It was, after all, the war in Bosnia that saw the re-emergence of concentration camps and a war crimes tribunal that vows to prosecute genocide.

For many, Monday’s blind eye toward the war underscored the manner in which Western nations are distancing themselves from the conflict in the former Yugoslav federation, judging it impossible to resolve.

France, the country with the largest contingent among U.N. peacekeepers and whose soldiers have been repeatedly targeted, is considering withdrawing its Balkan force.

The shelling Sunday and Monday is the latest step in a steady escalation of the three-year conflict in Bosnia, in which an estimated 200,000 people have been killed or are missing.

In recent days, most international attention has been focused on Croatia, where Croatian troops battled Serbian separatists, who retaliated by shelling the Croatian capital of Zagreb.

But the bloodletting in Bosnia has gone on apace, mounting since May 1, the end of a four-month cease-fire brokered last year by former President Jimmy Carter.

U.N. analysts say the Serbs now may be punishing Bosnians, who are loose allies of the Croats, for the Croatian offensive.

But just as likely, the analysts say, the Bosnian Serbs have launched a long-awaited retaliation for military gains made by Bosnia’s Muslim-led government, which effectively broke the cease-fire in March by taking two strategic Serb-held mountaintops vital to Serb communications.

And the consensus is the fighting will only continue.

“Things are going downhill,” U.N. spokesman Colum Murphy said in a telephone interview from Sarajevo. He earlier condemned the shellings as “heartless evil.”

The United Nations on Monday ruled out ordering NATO air strikes, citing possible retaliation against its peacekeepers and the danger of further inflaming Serb-Croat tensions. A stern letter of protest would be sent to Gen. Ratko Mladic, commander of Bosnian Serb forces, a U.N. spokesman said.

After the shelling of a crowded Sarajevo marketplace in February, 1994, the United Nations established a 12 1/2-mile exclusion zone around the city, in which all heavy weaponry was to be banned. Sarajevo is also a designated “safe area,” which means the United Nations and the North Atlantic Treaty Organization are supposed to protect it from attack.

Violating either designation by bringing in heavy weaponry or by bombarding Sarajevo is punishable by NATO air strikes. The United Nations concedes that the Bosnian Serbs have brought in “dozens” of heavy artillery pieces.

Yet there continues to be little international resolve to back NATO action.

Today’s fighting in the Balkans has strained post-World War II alliances--the United States, for example, has split with Europe over lifting an arms embargo against Bosnia--and has humiliated institutions such as NATO and the United Nations, which have been rendered largely irrelevant because of their failure to protect civilians and to make any of the warring factions listen to them, critics say.

Judging from Monday’s ceremonies in Paris, London and even Berlin, one legacy of World War II was that newly formed institutions such as the United Nations would keep the peace and prevent another worldwide conflagration. But today, Silajdzic said, “their silence is disgraceful.”