Military

DATE=10/16/00

TYPE=CORRESPONDENT REPORT

NUMBER=2-68008

TITLE=YUGOSLAVIA / POL (L ONLY)

BYLINE=STEFAN BOS

DATELINE=BUDAPEST

CONTENT=

VOICED AT:

INTRO: Supporters of new Yugoslav President Vojislav Kostunica say they

have agreed with allies of ousted leader Slobodan Milosevic to share power

in the country's main republic, Serbia. But as Stefan Bos reports from

Budapest, more political difficulties lie ahead for Mr. Kostunica.

TEXT: Although a revolution forced Slobodan Milosevic to admit defeat

in last month's presidential election, his key allies still dominate the

parliament and government in the country's main republic, Serbia.

Despite a week of what has been described as difficult negotiations and the

threat of new street protests, Mr. Milosevic's supporters remained unwilling to

resign from key ministries such as Justice, Information, Finance and

the Interior, which is responsible for the 100-thousand strong Serbian

police force.

According to an agreement reached on Monday, however, the Socialist Party of

ousted President Milosevic will have to share control of these key ministries with appointees of Yugoslavia's new president, Vojislav Kostunica. That is seen as difficult to achieve.

The Socialist Party will also keep the office of Serbian prime minister. But decisions of that office will be made by consensus with two deputy prime ministers, one from Mr. Kostunica's party and one from another opposition party.

The transitional government will function until December 23rd, when new

parliamentary elections will be held in Serbia, one day earlier than originally

planned. It is widely expected that the current Socialist Party and other

pro-Milosevic allies will lose the ballot.

However, it is not clear what will happen with the presidency of Serbia. There

are indications that Milan Milutinovic, who was appointed president of the republic

by former Yugoslav leader Milosevic, can stay in office until his term expires

in 2002.

Aids to Mr. Kostunica said, despite the far reaching compromise, they were satisfied with the agreement. There are still political difficulties ahead for Mr. Kostunica, however.

He still has to form a federal government which will oversee Yugoslavia's

two Republics, Serbia and Montenegro. But the government of Montenegro,

which is seeking independence, boycotted the federal elections and has so far refused to

recognize Mr. Kostunica as the President of Yugoslavia. In an apparent attempt to reconcile their differences, Mr. Kostunica already has offered to change the name Yugoslavia into the "Union of Serbia and Montenegro".

In addition, he wants to offer Montenegro's ruling party posts in his new Cabinet, if it backs his plan to appoint a former Milosevic ally as the country's new prime minister. On Tuesday, Mr. Kostunica will travel to Montenegro to discuss his proposals with that republic's president, Milo Djukanovic.

(SIGNED.)

NEB/SB/TDW