Serbs Retreat, Release Their Grip On Dubrovnik -- But Sarajevo Attack Continues; 20 Killed

Serbian forces have released their stranglehold on the ancient city of Dubrovnik, Croatia, and begun retreating on several other fronts in the face of mounting international pressure to end the Balkan war.

In Brussels, diplomats said the 12 European Community governments agreed today to ban trade with Serbia and its ally Montenegro but stopped short of imposing an oil embargo.

Meanwhile, mortar shells fired today by Serb fighters landed in a crowd lined up for bread in Sarajevo, the capital of Bosnia-Hercegovina, killing at least 20 people and wounding dozens, a radio reporter said.

More than 100 people were waiting in line near an open market, said Sarajevo radio editor Ivan Kristic, reached by telephone.

The attack shattered a Russian-mediated truce that had taken effect four hours earlier.

Russian Foreign Minister Andrej Kosyrev, visiting the capital of Bosnia-Hercegovina, announced late yesterday that the rival factions had agreed to establish a local cease-fire and to reopen the airport, which has been blockaded for weeks.

The attack came as Serb-dominated Yugoslavia opened a diplomatic offensive to try to stave off U.N. sanctions, promising to cooperate with peacekeeping efforts in war-ravaged Bosnia. U.N. diplomats say the offer comes too late.

Croatia, Serbia and Bosnia-Hercegovina - with Macedonia, Montenegro and Slovenia - are former constituent republics of Yugoslavia. Serbia and Montenegro are fighting to hold together as much territory as possible under the Yugoslavian name, while the other republics have declared independence.

In Dubrovnik, Croatia, where in December bombardment of the 11th-century central fortress began to turn international opinion in favor of the independent republics, residents poured into the streets, waving Croatian flags, singing and firing machine guns into the air as a Serbian retreat began.

It was a startlingly sudden change for the city of 60,000. First residents mourned the Croatian guardsmen killed in recent fighting, then they cringed as massive, mysterious explosions issued from behind Serbian lines atop the hills that divide this Adriatic sea coast from the interior of the Balkan region.

The explosions turned out to be the sounds of Serbs blowing up bunkers, buildings and roads along their line of retreat, according to Croatian officials.

"It's like a dream," Mayor Perro Poljanic said as he walked the waterfront at dusk, shaking hands and encouraging the citizenry. "We are moving to establish civil authority over areas Serbs have abandoned. . . . We hope and expect they will leave more territory tomorrow."

"It's indescribable," said Srdjan Gavranic, a lawyer. "For eight months, they were all around us, 200 meters away. You had to duck and run to cross the street."

Gavranic pointed out what is increasingly obvious in the Balkans - that Croatia has grown stronger over the past year, while increasing international pressure and isolation have begun to take a toll on Serbia. "I am glad it happened this way," he said of the abrupt Serbian withdrawal. "No one more got killed."