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CROATIAN ARMY PUSHING REBEL SERBS IN W. BOSNIA

The Croatian army advanced on rebel Serb forces Wednesday in western Bosnia, and one Croat leader declared they would keep seizing territory until the Serbs agreed to peace.

While thousands of Croatian soldiers were on the move, a high-ranking U.S. diplomatic mission took part in talks on a new peace proposal.In the last month, the Croats have reclaimed territory seized four years ago by Serbs in southern Croatia and adjacent western Bosnia. Today they were closing in on the Serb-held town of Drvar in western Bosnia, and Serb leader Rad-ovan Karadzic said Serb troops were defending the town.

Truckloads of Croatian soldiers were also reported streaming south to the vicinity of the Adriatic port of Dubrovnik. The Bosnian border is just a few miles from Dubrovnik and Croats want to push Bosnian Serb artillery out of range of the medieval city.

Croatia lost one-third of its territory to Serbs in a six-month war in 1991 that killed 10,000 people. The war in Bosnia, which has left at least 200,000 people dead or missing, began in April 1992.

The leader of the Bosnian Croats was adamant today about the conditions for peace.

Unless the Bosnian Serbs accept a peace plan, "the only remaining thing for the HVO (Bosnian Croat militia) and Bosnian army is . . . to undertake further liberation actions," said Kresimir Zubak.

Capture of Drvar would put the Croats within striking distance of Bosanski Petrovac, the last major Serb-held town in western Bosnia separating Croats from their allies, the troops of the Muslim-led government, in Bihac.

With the capture of Serb-held territory this month, the two allies have already broken the three-year Serb siege of Bihac.

A U.N. official, who spoke on condition of anonymity, said about 2,500 Croatian and Bosnian Croat soldiers, equipped with artillery and rocket launchers, were closing in on Drvar.

Bosnian Croat military sources reported a see-saw battle for western Bosnia. Those sources, who also spoke on condition of anonymity, said Serbs had advanced Monday and Tuesday, only to be thrown back by Croatian forces, who were now advancing. They said at least 30 Croats had been killed in the fighting.