US, RUSSIAN AMBASSADORS ON ECONOMIC AGREEMENT WITH KNIN SERBS

ZAGREB, Dec 2 (Hina) - US and Russian ambassadors to Croatia, Peter Galbraith and Leonid Kerestediants respectively, this evening returned from Knin, where they witnessed Knin Serb leader Borislav Mikelic signing an economic agreement with the Croatian government. Speaking at a press conference at the American embassy in Zagreb, both ambassadors welcomed the agreement, describing it as a step toward the peaceful reintegration of the UN Protected Areas. Galbraith said the fact that the agreement was signed today, when the situation in Bihac was so very serious, showed that both sides had "renounced the path of war." Knin Serb leader Mikelic today pledged to grant clearance to relief convoys for Bihac, Kerestediants said. He said Mikelic had ordered Serb troops to stay away from Bihac fighting from now on. Russia was interested in the reopening of the Adriatic oil pipeline, because it could be used for transporting Russian oil to the Rijeka refinery. When challenged by a reporter on the subject of Russia's alleged friendship with Serbs, Kerestediants said Russia was pressuring Croatian and Bosnian Serbs - and that the true nature of their so-called alliance would be revealed in time. Galbraith said the no-fly ban over Bosnia still held, and NATO would only change its patrolling system. "They'd better not be caught flying," he said. A draft Z-4 political agreement on reintegration of the occupied areas was already prepared and would soon be submitted to the two sides. He said the agreement was just and acceptable to both sides. The agreement provided for the "preservation of Croatia's sovereignty and integrity" and "considerable autonomy for Serbs in Sectors North and South, where they had a majority according to the 1991 census," Galbraith said. The plan also envisaged the return of refugees to all parts of Croatia and the protection of Serbs' human and ethnic rights in all of Croatia. (hina) as sd 022108 MET dec 94