NEWS ANALYSIS : The Next Challenge: Making the Pact Work : Peace: Fragile accord depends upon tense balance of power among still-bitter factions.

The agreement reached in Ohio by the presidents of Serbia, Croatia and Bosnia could well bring a kind of peace to the Balkans, a peace nurtured by the fatigue of the parties and the cold of winter.

But fundamental weaknesses in the accord do not encourage a long-term settlement of the bitter disputes that caused the war and that will continue to fester in the months to come.

As the popping of champagne corks mixed with small-arms fire in the devastated Bosnian capital of Sarajevo, joy was tempered by the cynicism that Bosnians of all ethnic origins have perfected.

The success of Tuesday’s hard-fought agreement rests on legs that are shaky at best: the creation of a balance of powers between the two portions of Bosnia; “free and democratic” elections within a year; the unfettered deployment of NATO; a constitutional arrangement that is fraught with the potential for governmental gridlock; a plan to return refugees to their homes that seems impossible to implement.

Cruelly, the best guarantor of any peace may be the stark, ruthless success of the widely condemned practices of “ethnic cleansing” and mass murder that characterized this war.

The region’s two principal powers, the Serbs and the Croats, have largely achieved their goals of creating ethnically “pure” states.

Croatia evicted an estimated 200,000 Serbs in two blitzkriegs during the summer and fall and has effectively annexed part of western Bosnia-Herzegovina; Bosnian Serbs who seized 70% of the republic through force and then ejected most non-Serbs will be allowed to keep about two-thirds of that territory.

Having accomplished that, both the Serbian and Croatian leaderships can make the argument that there is no need to continue fighting.

In fact, crucial to the progress that got American negotiators further than their European predecessors was the U.S. decision to drop efforts to reverse the gains made by “ethnic cleansing.” Srebrenica and Zepa, two U.N.-declared “safe areas” overrun by the Bosnian Serb army in July, were sacrificed early on.

The agreement calls for the former Yugoslav federation’s estimated 2 million refugees to be allowed to return to the homes they abandoned under the guns of enemy armies and militias. Yet such repatriation seems improbable. The personal nature of this war, where neighbors killed and raped former neighbors, makes reconciliation difficult and unlikely.

At the initialing ceremony in Dayton, the three presidents--Serbia’s Slobodan Milosevic, Bosnia’s Alija Izetbegovic and Croatia’s Franjo Tudjman--sat grim-faced and stiff.

In each of their capitals, television stations interrupted regular programming to give live coverage of the announcement of peace.

Barely had the ceremony finished when the Bosnian Serbs, whose leaders had been excluded from the talks but who were represented by Milosevic, raised a voice of protest.

Underscoring the difficulty in making all parties adhere to the terms of an agreement forged in a distant land, senior Bosnian Serbs said they could not accept the stipulated territorial divisions.

“What’s been done is an especially big mistake,” Momcilo Krajisnik, the leader of the self-styled Bosnian Serb parliament, told Bosnian Serb television.

Krajisnik also served on Milosevic’s negotiating team, making his statements all the more significant.

“What I am saying is that our delegation did not accept this plan, nor did it sign, nor will it sign either these maps or the plan itself.”

Indeed, it is far from clear that the leverage that U.S. and European leaders can use to force the Balkan leaders to keep to their word will be effective.

In the past, even Washington’s closest ally, Tudjman, has ignored U.S. demands that he respect the human rights of Serbs. And Milosevic has allowed savage atrocities to be committed by his Bosnian Serb proxies even as he was currying U.S. favor.

U.S. officials point to the battered region’s need for economic aid, reconstruction money and re-integration into Europe and Western institutions as incentives that can make Tudjman, Milosevic and, to a lesser degree, Izetbegovic toe the line. Yet such incentives are not new.

American negotiators say that whether the accord will work also depends on the creation of a balance of power between the two ministates that will coexist within the future Bosnia.

Putting the Bosnian Serbs and the Muslim-Croat alliance on equal military footing implies either forcing the Serbs to draw down and accept caps on their weaponry, or the more likely alternative of taking the Muslims up to the Serbs’ levels.

U.S. officials have pledged to provide training to the Muslim-led government’s army and see that an international arms embargo is lifted.

But the fact that both ministates--”entities,” as the diplomats call them--will be allowed to keep separate armies within the single Bosnian state is an unusual relationship with a large potential for conflict.

Many such details will have to be worked out in the weeks and months that follow, each with the potential of exploding into greater crisis.

For now, the momentum behind reaching accord seemed to outweigh the complexities that might have otherwise caused participants to throw up their hands in surrendering despair.

Failure to cinch a deal would have hurt Milosevic the most and could have destabilized the region further by causing him greater political trouble at home.

Milosevic made numerous sacrifices of his own people to demonstrate to the West his eagerness to cooperate. His calculation was that such sacrifice could be justified as long as he gained something in return, namely the lifting of punitive economic sanctions.

Even before the agreement had been initialed, Milosevic appeared on Belgrade television to announce he had achieved an immediate suspension of the sanctions.

Developing a spin that Washington would be proud of, he declared great victories for the Serbs, saying he had won Brcko, a strategic city on the Serbs’ vital lifeline from Serbia to western Bosnia. (In fact, the fate of Brcko, still in Serb hands, was not decided but deferred for later negotiation.)

Tudjman also faced the wrath of Bosnian Croats, who, though they are citizens of Bosnia, are more loyal to Zagreb than to Sarajevo and form Tudjman’s principal power base. Any sacrifice of traditionally Croatian land along the Brcko corridor to the Serbs would be viewed as treason.

“It is obvious that the peace achieved brings some implications which in an emotional sense can hardly be understood,” Vladislav Pogacic, an official with the Bosnian Croat community, said in Zagreb. “We are still not aware of the consequences it will bring.”

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What It Means

A glance at the agreement on ending war in the Balkans:

THE AGREEMENT

Splits Bosnia roughly in half between a Muslim-Croat federation and a Serb state loosely tied together by a weak central government. The central government is to have a democratically elected president and parliament.

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THE U.S. ROLE

United States would provide about one-third of the NATO implementation force--expected to number 60,000. It would also help finance the rebuilding of Bosnia.

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NEXT STEP

President Clinton’s challenge is to sell a reluctant U.S. public and Congress on American troop participation.