Balkan Enemies OK Plan to Split Bosnia in 2 Parts : Accord: Rebel Serbs would get their own entity in return for relinquishing territory. But document does not mention a cease-fire, and NATO air strikes are to continue.

In a major first step toward a peace deal, former Yugoslav republics agreed here Friday to create a separate Serbian entity in Bosnia-Herzegovina, a “Republika Srpska” that would share the country with the Muslim-Croat federation.

The accord, the first of its kind in the 41-month war, marked a major concession by the Bosnian government, which has long refused to recognize Serbian self-rule in any part of Bosnia. But in exchange, the Bosnian Serbs agreed to relinquish a chunk of the 70% of the country’s territory they control and to accept just 49%.

Under the agreed-upon principles, Bosnia-Herzegovina would remain a single, internationally recognized country within its current borders, though separate Muslim-Croat and Bosnian Serb entities would be allowed to establish their own diplomatic relationships with neighboring countries.

U.S. Assistant Secretary of State Richard Holbrooke, who chaired the talks, declared the agreement “a milestone on the road to peace. There is now, for the first time, an agreement that, limited though it is, moves us toward peace.”

Secretary of State Warren Christopher, in Washington, echoed that assessment, saying the agreement is “an important step forward, but there are many difficult problems that lie ahead.” He also praised Holbrooke for his mediation.

Christopher added, however, that the Geneva conference will not affect the activities of an international war crimes tribunal that has already indicted Radovan Karadzic, Gen. Ratko Mladic and other Bosnian Serb leaders on charges of crimes against humanity.

The accord reached Friday will not immediately stop the bloodshed in Bosnia. No mention was made of a cease-fire--either in the document or during the negotiations--and the North Atlantic Treaty Organization said Friday that its air strikes on Bosnian Serb positions will continue. Similarly, the future of the embattled province of Eastern Slavonia, claimed by Croatia but controlled by Serbs, was not mentioned.

Bosnian Foreign Minister Muhamed Sacirbey said his government had simply decided to “take very unjust realities into consideration” and begin to “work back toward justice.” He said he was willing to make concessions to end “once and for all” Serbia’s historic ambition to create a Greater Serbia from the ruins of the Yugoslav federation.

The agreement closely follows a peace plan touted for weeks by the Contact Group, which comprises the United States, Germany, France, Russia and Britain. The group, led by Holbrooke, announced the accord after a seven-hour meeting at the U.S. mission here with foreign ministers from Croatia, the Bosnian government and the rump Yugoslavia, which represented the Bosnian Serbs.

But as if to underscore the difficulties facing efforts to end the war, which has left at least 200,000 people dead or missing, NATO warplanes continued to hammer Bosnian Serb forces Friday, driving home U.N. demands that the rebels lift their siege of the Bosnian capital, Sarajevo. NATO officials said there was no evidence that the Serbs were moving their heavy weapons outside the 12 1/2-mile exclusion zone, as demanded by the United Nations.

In Sarajevo, the main boulevard was hit by a mortar round that wounded seven people on the stretch of road known as “sniper alley.” Serbian gunners fired an antiaircraft missile at a NATO jet, missing, but the U.N. rapid-reaction force blasted the gun position with 50 artillery and mortar shells. Bosnian Serbs claimed the counterattack hit a hospital, killing 10 people, and U.N. officials said they were investigating the claim.

NATO Secretary General Willy Claes said Friday that air strikes will not stop until the Serbs withdraw heavy weapons capable of firing into the city. “There is a clear agreement between the United Nations and NATO that once the operation has started, it won’t be interrupted as long as the threat is still there,” he said.

Speaking to The Times and three European newspapers, Claes said a U.N.-NATO agreement allows aircraft of the Atlantic Alliance to strike ammunition facilities, communication centers and air defense systems, which have been hit, but also Serbian heavy weapons, which so far have not been attacked from the air. Claes said additional approval from member nations would be needed to extend strikes to such targets as roads, rail lines and bridges.

Although optimistic about the accord reached in Geneva, the Contact Group warned in a statement that it “does not constitute the end of the tragedy in the Balkans. Far from it. Significant differences exist . . . that will require continued intense negotiations.”

Igor Ivanov, Russia’s first deputy foreign minister and part of the Contact Group, said: “We leave here with no particular euphoria. We all understand it is the beginning of a process.”

Under the agreement, Bosnia-Herzegovina would remain one country with one seat at the United Nations, but with two autonomous parts and a “central connecting structure.” The accord also calls for a system of arbitration to resolve disputes between the two halves, as well as the creation of a joint human rights commission and joint corporations, financed by both states, to operate a transportation network and other services.

While significant, the agreement seemed to highlight the deep differences that remain between the parties. As Holbrooke acknowledged, the precise meaning of many parts of the accord “will have to be worked out.”

Although the parties agreed to the Contact Group proposal of a 51%-49% territorial division of Bosnia-Herzegovina, it remains for subsequent negotiations to determine who gets what parcels. Still open for debate, for example, is control of Sarajevo, which is currently in Bosnian government hands but is claimed by the Bosnian Serbs.

The contentious issue of Serb-controlled Eastern Slavonia, which the United States contends should be returned to Croatia, came up during the meeting but was dropped quickly when it became clear that the parties were nowhere near an agreement, diplomats said.

Also open is the question of whether the parties will hold to the agreement. The Contact Group said the principles had the full agreement of the foreign ministers and their presidents. But it remains to be seen whether Bosnian Serb military leaders will willingly give up land they currently control.

Bosnian Serb leader Karadzic and his military chief were represented at the table by Yugoslavia’s government, and some Bosnian Serb leaders were part of that delegation. But their private disagreements were in evidence Friday during breaks in the talks. A diplomat in the U.S. mission said the Serbian delegates could be heard arguing loudly behind closed doors. “I mean, they were yelling at each other,” he said.

“In theory,” said a Western diplomat, speaking on condition of anonymity, Serbian President Slobodan Milosevic “has the right to represent them. So let’s see what they do. If they denounce it, they are in effect repudiating the agreement they signed only a week ago. And they would really be challenging Milosevic’s authority.”

The parties came to the table Friday with suggested changes to the wording of the document. But a Western diplomat said the Contact Group resisted efforts to change it, arguing that “if one side changed it, the other side would unravel it. We just had to hold it together with wire and glue.” In the end, the document was signed as presented.

The inclusion of the name Republika Srpska was a major victory for the Serbs, who use the name when referring to the self-styled country they have forged by “ethnic cleansing” and warfare.

At Pale, his headquarters outside Sarajevo, Karadzic clearly relished the acknowledgment of his self-declared republic.

“We are no longer the ‘Bosnian Serbs,’ ” said Karadzic, appearing in military fatigues. “Many commentators were forced to utter the words Republika Srpska today.”

Bosnian government officials have long contended that allowing the Bosnian Serbs to keep any portion of the land they have seized in fighting during the last 3 1/2 years would reward Serbian aggression. Nevertheless, they had earlier agreed to the Contact Group map distributing Bosnia on a 49%-51% basis.

An American diplomat said, though, that it was significant that the Milosevic government in Belgrade had agreed to allow Bosnia to remain one country. “Serbia has set aside, for the time being, and for the indefinite future, its hope of annexing half of Bosnia,” the diplomat said. “Milosevic is now, having started this war, trying to get it stopped.”

No additional meetings have been scheduled among the parties signing the agreement--and they won’t be until further progress is made, diplomats said. “Our objective is to first make diplomatic gains and then meet to lock in those gains,” Holbrooke said.

In the meantime, the Contact Group plans to continue traveling between the capitals of the former Yugoslav federation. It will meet next week in Geneva at the Russian mission, and additional meetings are planned for later in Moscow and Rome.

Times staff writers Tracy Wilkinson in Sarajevo, Tyler Marshall in Brussels and Norman Kempster in Washington contributed to this report.