Panic stages last-minute peace flight: Yugoslav PM in surprise visit to Sarajevo - Victims of the fighting continue to pour out of Bosnia as gunfire breaks the ceasefire deadline

THE Prime Minister of the new, reduced Yugoslavia came up with a startling piece of showmanship yesterday when he made a surprise visit to the Bosnian capital, Sarajevo, in order to hold talks with the Bosnian leader, Alija Izetbegovic.

Milan Panic, a Serbian-born Californian businessman who flew back to Belgrade to become Prime Minister this month, stepped out of an armoured troop carrier at the United Nations headquarters in Sarajevo, declaring that he wanted 'peace - and the withdrawal of all weapons'.

Radovan Karadzic, whose Serbian forces have been besieging Sarajevo for the past three months, has made similar promises on several occasions, but so far without noticeable effect.

Mr Panic talked of making a symbolic handover of a tank to General Lewis Mackenzie, the Canadian commander of the UN forces in Sarajevo, though it was unclear whose tank this would be, and by what right Mr Panic would hand it over.

Belgrade now seeks to maintain that the Yugoslav army no longer exists in Bosnia, and that the attacks on Sarajevo have nothing to do with Belgrade.

Mr Panic also declared that 'ethnic cleansing (the deportation and killing of Muslims, especially in eastern Bosnia) is over'. According to Mr Panic, 'I want those refugees back home safe where they belong.' Belgrade has always strenuously insisted that it bears no responsibility for the atrocities in eastern Bosnia. The Yugoslav Prime Minister seemed to put the responsibility for ending the bloodshed upon the Bosnian leader. He said: 'After today's meeting with Alija Izetbegovic, it will be clear whether he is for peace, or not.'

Gunfire echoed across central Sarajevo yesterday evening, more than an hour after a ceasefire agreed by the Bosnian government and its Serbian opponents in London on Friday was due to come into force.

Machine-gun and sniper fire and isolated mortar explosions were heard, indicating the truce was being ignored. It was not possible to tell who was firing.

Earlier, a barrage of mortar fire fell close to UN headquarters on the outskirts of the city where Serbian-Bosnian peace talks were taking place, only 20 minutes before the agreed ceasefire deadline. There was also the sound of outgoing artillery fire from Bosnian forces.

A French C-130 Hercules was hit by two bullets as it landed on Saturday, UN forces said, but nobody was hurt. Crews flying to Sarajevo line their cockpits with bullet-proof vests before landing.

Radio Sarajevo reported a heavy artillery barrage on the small town of Breza, 20 miles north-west of Sarajevo, early yesterday, as well as against the towns of Turbet, in the centre, and Bihac in the west, where two people were killed.

In an unlikely twist during his visit, Mr Panic even sought to suggest that Belgrade is keener on peace than the embattled Bosnian leadership.

The arrangements were thrown together at the last moment, and were described by one UN official as 'a bloody cock-up'. Mr Panic seemed almost proud of the last- minute arrangements, and boasted that it had all been set up in 15 minutes on the phone.

There was no clear guarantee that Mr Izetbegovic would agree to meet Mr Panic. Confusion surrounded the circumstances of his departure, and the visit looked as though it might turn out to be, as UN officials described it, 'a wild goose-chase'.

He failed to catch a flight at the time originally set by the UN: then Tanjug, the Belgrade news agency, reported that he had already caught a helicopter to Sarajevo: the UN then laid on an aircraft in Belgrade, which he eventually took at lunchtime.

Just before Mr Panic arrived the atmosphere in Sarajevo was very tense. In the late morning, around a dozen shells exploded near the city centre. There was also the sound of outgoing artillery fire from Bosnian forces.

UN soldiers noted the same pattern in districts around the airport and on the hillsides to the north of the city. But by midday the sounds of shelling became sporadic.

Kosovo's struggle, page 10