NEW VICTIMS, NEW VICTORS

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Ljubica Milic was drenched with rain last Wednesday as she sat with her two sleeping children at an abandoned gas station on the road between Banja Luka, the largest city in Serb-held Bosnia, and Belgrade. As an equally sodden string of refugees streamed past, the young Serb from the Croatian village of Obrovac explained how she had been tricked by a war profiteer into making the worst deal of her life. "All I had was 200 deutsche marks [$139]," she says in a voice devoid of emotional inflection. "He asked me for 500 deutsche marks to get me to Belgrade, and I told him I would sleep with him for the difference. I did, but he fooled me, so I'm here in the middle of nowhere with no money, my kids and no way to get to Belgrade. All I have left is my body."

Nearly 150,000 Serbs like Milic spent most of last week fleeing before the army of Croatian President Franjo Tudjman. Tudjman's soldiers needed just five days to conquer Krajina, the crescent-shaped region whose Croatian Serb majority seceded from Croatia in 1991 with the help and encouragement of Serbian President Slobodan Milosevic. Tudjman's victory last week created the largest exodus of refugees since the Balkan wars began; at the same time, the offensive shook up the region's political and military balance of power, and as a result seemed to create an opportunity for peace. The White House is now attempting to seize that opportunity by presenting a new plan for the Balkans. For Bill Clinton, the risks are high: "If we come back with a diluted plan, or if we fail to win acceptance of it, the President is going to look totally incompetent," says an Administration official. For the people in the region, the risks are even higher: as a senior U.S. military source in Europe puts it, "A slight miscalculation on anybody's part, and we face a general Balkan war."

The assault began at dawn on Aug. 4 with a bombardment of the Krajina Serbs' capital, Knin. When more than 100,000 Croatian troops attacked, the Serb army of some 50,000 men seemed simply to melt away. Croatians shelled cities and towns, harassed civilians and engaged in an orgy of looting and burning of Serb homes. "You're not going to see anything like what the Bosnian Serbs are doing, massacres of 3,000 people and such," said one U.N. official. "But it is still bad." Many Serbs still carry memories of the massacres their parents and relatives suffered at the hands of the Croats' pro-Nazi Ustashe government during World War II, and fearful of another pogrom, they left en masse. After inhabiting Krajina for 500 years, the Serbs are now virtually gone from there.