Making A Deal: Why Milosevic Blinked

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The war's brutalities make it inconceivable for many Albanian refugees to accept even the most nominal Serbian sovereignty. "It will be impossible for us to live together," says Rifat Veseli, a young Kosovar arguing with his friends in tent C-71 at Macedonia's Stenkovec camp. "How can Western leaders expect me to wake up and say good day to a Serb?" While K.L.A. officials are paying lip service to the deal, the likelihood of patching together a political structure for real cohabitation is dim.

NATO has plenty more devilish details to iron out if the settlement plan is to work. The two-page, 10-point agreement left key issues unresolved, including sensitive questions of command. For weeks Moscow not only insisted on participating in the peace force but tried to place its troops in charge of Kosovo's northern quadrant, where many Serbian holy sites lie. Washington refused for fear that would effectively partition the province. Now the diplomats are wrangling over just what role the Russian troops will play and who will command them. Russia's proud military men oppose the settlement, making it harder for Moscow's troops to be tucked comfortably under NATO's "unified" command.

The ambiguities over Kosovo's political structures are especially ripe for the sort of chiseling Milosevic does so well. But for the moment, the time had come to cut his losses. It had been easy to ride out the first 30 days of air strikes, when bad weather and alliance timidity limited the damage Serbia suffered. But "he was feeling the pain" in the second month, says a U.S. intelligence officer, as NATO racked up 350 attack sorties every 24 hours. Bombs and missiles had blitzed much of Serbia's heavy industry, energy sector and transport network. Citizen morale crumbled under water shortages and power outages as NATO hammered the country's electric grid. Protests broke out in the smashed industrial cities of the south.

U.S. intelligence spotted Serbian soldiers in Kosovo steadily slipping away from their posts. A K.L.A. offensive lured Serbian tanks out of their hiding places, massing them into cannon fodder for allied warplanes. Even the gruesome pictures of Serbian civilians mauled by errant bombs failed to crack NATO determination. Now Clinton was holding serious discussions about ground troops, a possibility Milosevic thought had been safely discarded. Perhaps most critical of all, the Hague war-crimes tribunal finally indicted him on May 27, placing his very life in jeopardy if he ever slipped from power. "He recognized he wouldn't prevail," says a U.S. official, and began to put out peace feelers.