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DATE=10/11/00

TYPE=CORRESPONDENT REPORT

TITLE=YUGOSLAVIA / POLITICS (L)

NUMBER=2-267242

BYLINE=EVE CONANT

DATELINE=BELGRADE

CONTENT=

VOICED AT:

INTRO: President Clinton's chief adviser to the Balkans, James O'Brien, is headed to the region to discuss the lifting of U-S sanctions with Yugoslavia's new leadership, now that former leader Slobodan Milosevic has been forced out of power. Correspondent Eve Conant in Belgrade reports it will be the first high-level meeting between a U-S official and the new Yugoslav president, Vojislav Kostunica.

TEXT: Mr. O'Brien's task will be to discuss the process of lifting sanctions while at the same time ensuring that such a move will not enable former aides of Slobodan Milo to misuse state assets. The European Union has already said it will partially lift sanctions against Yugoslavia, including an oil embargo and commercial flight ban. The E-U has also offered a huge aid package to help rebuild Yugoslavia's infrastructure, much of which was damaged by NATO air strikes in 1999.

As Western leaders descend on Belgrade to open relations with the former pariah state, President Vojislav Kostunica is working to consolidate power even while former leader Slobodan Milosevic remains in Serbia. Mr. Kostunica has expressed confidence in his control over key institutions in Yugoslavia, but there is concern about the loyalty of the police forces.

President Kostunica was due to met Wednesday with army chiefs appointed by Slobodan Milosevic, who have been reluctant to accept his authority. But the Beta news agency reports the meeting of Yugoslavia's supreme defense council has been postponed to allow time for the Montenegrin president, Milo Djukanovic, to recover from a traffic accident.

The Defense Council consists of the Yugoslav president, who is the chair, the presidents of the two republicsSerbia and Montenego, the Yugoslav army chief of staff and the Federal Defense Minister.

The Montenegrin leader had boycotted earlier meetings of the body, accusing former leader Mr. Milosevic of using the military to exert pressure on Montengro's pro-Western leadership. Yugoslavia's defense chiefs have remained loyal to ousted leader Mr. Milosevic and have not formally recognized Mr. Kostunica as president.

More backers of Slobodan Milosevic are reported to have fled the country or resigned, while his parties make a last-ditch stand to thwart democratic change. The leader of Serbia's ultra-nationalist Radical Party, Vojislav Seselj, on Tuesday accused supporters of the new president of attacking his party, and said he would no longer participate in talks.

The Yugoslav state prosecutor Vukasin Jokanovic left for Beijing Tuesday evening, Beta reported.

The commander of a federal interior ministry police brigade that tried unsuccessfully to prevent pro-democracy protesters from entering parliament has also resigned. (Signed)

NEB/EC/KL/PLM