RESCUE IN THE BALKANS : President Salutes Rescued Pilot as ‘American Hero’ : Bosnia: Air Force officer’s return to U.S. hands brings joy to his family, relief to White House. NATO ministers back 10,000-member rapid-reaction force.

America rejoiced Thursday at the rescue of a downed F-16 pilot from a rebel Serb-encircled hillside in Bosnia-Herzegovina as Western defense ministers gave the allied effort in the Balkan war new momentum by endorsing the creation of a multinational rapid-reaction force to protect embattled U.N. peacekeepers.

Capt. Scott F. O’Grady was hailed by President Clinton as “a true American hero,” after a 40-aircraft mission eluded Bosnian Serb fire to rescue O’Grady from the fogbound forest near where his F-16 was shot down almost six days earlier.

Military aides described how O’Grady, 29, hid by day and traveled by night through the wind-swept forest, trying to contact North Atlantic Treaty Organization forces and subsisting on a diet of rations, insects and grass.

His plane, on a NATO patrol over a “no-fly” zone, was brought down by a Bosnian Serb-fired SA-6 missile last week after earlier allied air strikes on the rebel Serb-controlled city of Pale raised tensions in the region.

After almost six days of trying to read sometimes-hopeful, some times-discouraging signs of his fate, family members and military colleagues exulted when they learned that he was safe.

“We are so grateful and so thankful,” said an emotional Mary Lou Scardapane, his mother, after she and other family members spoke by telephone to the pilot, who was aboard the amphibious assault ship Kearsarge, where he was being treated for hypothermia, exposure and a burn.

For the White House, lately besieged by attacks on its Bosnia policy, O’Grady’s rescue was a tonic. His return laid to rest Clinton’s private fears that the pilot was captured by Bosnian Serb forces, held hostage and would be paraded before television cameras in the kind of political drama that helped undo Jimmy Carter’s presidency.

In other developments Thursday:

* NATO defense ministers formally endorsed a British-French plan for a 10,000-member force capable of protecting United Nations peacekeepers from military threat.

* The U.S. House of Representatives voted for a unilateral lifting of the arms embargo on Bosnia, amid continued sharp congressional criticism of the Administration policy on the 3-year-old civil war. Embargo opponents have long argued that it most penalizes the Muslim-led Bosnian government and aids Bosnian Serbs, who generally have been better armed.

* Sniper and artillery fire rocked Sarajevo for the second consecutive day, as officials of several humanitarian relief groups met with leaders of the Bosnian Serb military forces in their Pale headquarters to discuss opening aid routes.

In Washington

A newly released opinion poll had suggested that Clinton’s job-approval rating was again in decline, after last week’s publicity about his apparent intentions--quickly denied--to broaden the potential use of U.S. ground troops in Bosnia.

“Four words I thought I would never use in one sentence: Good news from Bosnia,” Press Secretary Mike McCurry told reporters Thursday morning as he briefed them on O’Grady’s rescue.

Referring to Clinton as “the commander in chief,” White House aides talked about bringing the rescued pilot to Washington for a welcome-home ceremony to try to catch a little reflected glory.

Those plans remained uncertain, however.

The White House scorned earlier claims by the Bosnian Serbs that they had been holding O’Grady. Those claims were “consistent with the outrageous behavior we have seen from the Serbs throughout the Bosnian conflict,” said McCurry, adding that they were “obviously lying.”

On Thursday, Bosnian Serb officials in Pale asserted that they had picked up O’Grady’s radio signals but had not interfered because “we understood it was a humanitarian mission,” an official told Reuters.

But an Administration official said that claim did not square with the fact that a missile and small arms had been fired at the rescue mission.

Although he shared some of the credit for the wildly successful rescue operation, the mission did not win Clinton any surcease from congressional criticism of his Bosnian policy.

The House decision to lift the arms embargo against Bosnia came on a 318-99 vote on an amendment to a bill that would cut foreign aid and reorganize the State Department.

The Administration has disregarded other, non-binding votes on lifting the embargo, but the bill’s sponsors contended that the measure would be binding if it is also approved by the Senate.

“There have to be consequences for aggression,” said Rep. Albert R. Wynn (D-Md.).

Opponents have long argued that lifting the embargo would step up the fighting and force the Administration to deliver on a promise to send in 25,000 troops to assist in a U.N. pullout from Bosnia.

Sen. John Glenn (D-Ohio), a former fighter pilot, argued that the Administration should begin hitting key targets, such as Bosnian Serb headquarters, instead of firing on “artillery tubes in the woods.”

In Europe

In Brussels, Robert E. Hunter, the U.S. ambassador to NATO, told reporters at a briefing that there was “not a single dissenting voice” when the proposal for a rapid-reaction force was discussed at a meeting of the alliance’s high-level Defense Planning Committee.

“There was a very clear show of solidarity,” he said.

The plan, proposed by the French and British, will be acted on formally later this month.

Defense Secretary William J. Perry said that creation of the rapid-reaction force will mark “a turning point” in the West’s efforts to deal with the situation in Bosnia. He called it “the best chance we have” of enabling the United Nations to keep its peacekeepers in the country.

NATO officials also gave their blessing to new moves by allied military leaders to beef up protection for pilots enforcing the “no-fly” zone over Bosnia.

The steps, which already are in effect, require NATO fighters flying over Bosnia to be accompanied by companion aircraft that together are capable of destroying enemy missile batteries. These include missile-carrying F-4G Wild Weasels and F-111 electronics-jamming planes.

Despite the allies’ seeming unity over the plan to reinforce U.N. troops, Britain warned that the allies still might pull peacekeepers out entirely if the Bosnian Serbs continue trying to prevent them from carrying out their humanitarian missions.

British Defense Minister Malcolm Rifkind said that the first real test of the allies’ new policy will come when U.N. forces attempt to resupply Bosnia’s three embattled eastern enclaves, where relief convoys have been cut off for the last few weeks because of Serb guerrilla attacks.

He said that if the Serbs or the Muslims try to block the resupply effort again, the United Nations will consider whether to withdraw its forces once and for all. “If the consent isn’t there, then the U.N. won’t remain--it’s as simple as that,” he declared.

But Perry said later that he thought the existence of the rapid-reaction force would make it “easier to come by” increased cooperation from the Bosnian Serbs. He said he thought NATO forces now are “entirely capable of dealing with” Bosnian Serb antiaircraft missiles.

Hunter and other NATO policy-makers are expected to meet again Wednesday to consider a broader plan to be used in case the British-French scheme fails and allied governments decide to withdraw their peacekeeping troops from Bosnia entirely.

Under that proposal, the allies would send in about 58,000 personnel--including 24,000 U.S. ground troops--to help evacuate the 22,000 peacekeepers now in Bosnia.

U.S. officials said that the withdrawal could take as long as 22 weeks and cost between $700 million and $1.1 billion.

Still a possible matter of dispute for the allies is whether operations conducted under the proposal should be totally under NATO command or should be placed under U.N. control.

U.S. and NATO officials said adamantly that they want to avoid the “dual-key” system used in peacekeeping operations. Under that system, both the U.N. and NATO commands must give their approval to any military actions. Often, the two forces disagree.

Also still up in the air is whether the allies would resume their air strikes in retaliation for the refusal of the Bosnian Serbs to obey U.N. directives. The Bosnian Serbs have demanded that the United Nations eschew further air strikes as a condition for a truce.

Although U.S. military strategists have been eager to punish the Bosnian Serbs for shooting down the F-16, there was widespread recognition that NATO could not act as long as the Serbs continue to hold some U.N. peacekeepers as hostages.

But Rifkind said Thursday that air strikes “remain an option.”

Times staff writers Doyle McManus in Washington and Dean E. Murphy in Zagreb, Croatia, contributed to this report.