Panic for peace, double-glazing or eternal life: Despite sharing a flight from Sarajevo to Belgrade with the Yugoslav PM, Steve Crawshaw is baffled by his motives

THE new Yugoslav Prime Minister, Milan Panic - a Serbian-born businessman from California - settled back inside the Antonov-32, whose Ukrainian crew were preparing to fly us from one closed airport to another. The aircraft - UN regulation-white and painted with the UN insignia - was departing from Sarajevo (closed because it is too dangerous) for Belgrade (closed because of international sanctions, designed to persuade Serbia that killing people is wrong).

Mr Panic's trip to Sarajevo, where he talked to the Bosnian President, Alija Izetbegovic, had been unexpected. Immediately after its conclusion on Sunday night, Mr Panic was in expansive mood, as he chatted to me, sitting beside him on the noisy transport aircraft. The wooden seats were scarcely luxurious, by the standards that prime ministers and Californian businessmen are used to. Still, Mr Panic did not seem to mind.

As we flew up over the hills surrounding Sarajevo - where Serbian gunmen were firing on the Bosnian capital to mark the ceasefire that had come into effect a few hours earlier - Mr Panic sipped champagne from a plastic beaker, and raised his arms like a victorious boxer. It was unclear what he had achieved, but he seemed pleased with his day.

Tugging at his monogrammed cuffs, Mr Panic - who made his fortune in pharmaceuticals - explained that his mission was peace. 'There's a constant firing of mortars. People are killed. That cannot happen. I've never seen a situation like this, where people play games of war. These people are playing games]'

In a revealing phrase, Mr Panic pointed out that Serbian forces have a good reason for talking of peace, as they have done in the past few days. 'I think they are starting to put their cannons under UN control. Why? They don't need anything any more.' The Serbian forces besieging Sarajevo have taken over two-thirds of Bosnia in the past few months.

Peace in Yugoslavia, double-glazing or eternal life. You can easily imagine the dapper and evangelical Mr Panic selling you any of those. And yet, something is not quite right. Everybody, he declares, is equally to blame for the Bosnian war. He denies that Serbia has anything to apologise for, more than any other party. Instead, he wants the slate wiped clean. In effect: 'If you agree to shake hands and say nothing about what has happened, then my brothers will not steal any more of your possessions and will stop killing your family.' Not surprisingly, the Bosnians are unimpressed.

Mr Panic insists that he is against the 'ethnic cleansing' carried out by Serbian forces in eastern Bosnia. 'If somebody kills Muslims, he must be punished.' But, on specifics, he is less outspoken. On Arkan - a Serbian fighter who lives unmolested in Belgrade, and whose forces have committed many atrocities in Bosnia - Mr Panic is coy, saying only: 'We will see how he behaves now.' The Serbian leadership appears to hope that Mr Panic will persuade the West that the new rump Yugoslavia - Serbia and its small ally, Montenegro - is an acceptable member of the international community. Even now, that strategy might succeed. It is still unclear whether Mr Panic will be an active ally of the Serbian nationalist leader, Slobodan Milosevic; his powerless pawn; or even, conceivably, his adversary.

Mr Panic almost seems to encourage this last interpretation. He criticises 'cheap politicians who have played on nationalism, and created a civil war'. That, I suggested, sounded very like a description of Mr Milosevic. In reply, the Prime Minister simply smiled. Asked if he would really clash with the Serbian President, the man who helped to appoint him, Mr Panic suddenly asserts himself. 'If he gets in my way, God help him]' The vision of the amiable Mr Panic standing up to Mr Milosevic, the toughest politician in the Balkans, seems implausible.

Mr Panic's visibly warm relations with Serbian hardliners suggest that his own doveish credentials are ambiguous, at best. In an extraordinary would-be public-relations stunt, he presented a white 'ribbon for peace' to General Mladic, one of the most hardline of all the Yugoslav army leaders.

Mr Panic says he likes being Prime Minister of Yugoslavia. 'I like big challenges, and this is certainly a big one.'

It is just possible that Mr Panic's showman style - he has been described as the Ross Perot of the Balkans - will bring positive change to his benighted country. But it seems unwise to put much money on that. If things do not work out, he will no doubt return to California, with 'first prime minister of the rump Yugoslavia' as an unusual addition to his CV.

(Photograph omitted)