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REBEL SERBS RETREAT, VOW NOT TO ATTACK

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After a week of defeats by the Croatian army, rebel Serbs in Croatia retreated Sunday and promised not to attack government troops in an effort to prevent attacks on their stronghold.

In an agreement with the United Nations, the rebels also pledged to stay away from Bihac, a Muslim enclave in northwestern Bosnia where they had joined an assault by Bosnian Serbs and renegade Muslims.The offer was an attempt to limit losses of Serb-held lands in neighboring Bosnia. Croatian forces also are poised to recapture land in their own republic that was seized by rebel Serbs during a six-month war in 1991.

Croatia's government, clearly interested in pressing its military advantage, rejected the concessions by the Serbs.

Even before the Serbs made the offer, there were signs the fighting might simply be moving to a new location.

The rebels were pulling 1,300 fighters out of Bihac, moving them back to Serb-held territory in Croatia to defend against a possible government attack.

The Croatian government, which was sending more troops to nearby front lines, said it had no immediate plans to attack the rebels' self-proclaimed capital, Knin.Yasushi Akashi, who led the U.N. delegation at the 51/2-hour meeting in Knin where the Serbs made their offer, warned of the risk that the war in Bosnia would spread north into Croatia.

"The danger of the full-scale war starting in the next several days or weeks cannot be excluded yet," he said. "This is the time for the maximum restraint on all sides."

As if to illustrate his point, Serbs from Croatia launched an intense shelling attack 15 miles north of Bihac just as the agreement was reached, said Col. Jespar Holsoe, U.N. commander for the area.

Under the accord, approved verbally by Croatian Serb leader Milan Martic, the rebels committed themselves not to attack Croatian targets unless provoked, and said they would halt all military action in Bihac. But the accord made no mention of their allies, the Bosnian Serbs and rebel Muslims.

The Croatian Serbs also agreed to allow the United Nations "unhindered access" to areas around Bihac and to let aid convoys from Croatia travel through their territory to Bihac. The Croatian Serbs also were promised some aid.

But Croatian President Franjo Tudjman rejected the rebel Serbs' concessions, saying U.N. monitors had to be either in all disputed areas, or none at all. He clearly was not eager to have the United Nations monitor his troops' activities as they push toward Knin.

In a letter to Akashi, Tudjman also said he refused to negotiate with Croatian Serb leader Milan Martic or "any other war criminal."

A key Croatian demand is negotiations to restore the Zagreb government's authority in the breakaway lands, something the Serbs have vowed never to accept.

Croatia has sent thousands of troops across the border into Bosnia.