From .......... Associated Press

December 15, 1996

By MISHA SAVIC ........... AP Writer

BELGRADE, Yugoslavia (AP) -- A court controlled by President Slobodan Milosevic annulled his party's electoral victory in Serbia's second-largest city and ordered the original opposition win restored, the opposition said Sunday.

The move appeared to be an attempt by the Serbian leader to defuse nearly a month of protests, the largest since he came to power in 1987.

Courts annulled opposition victories in Nov. 17 local elections, leading to daily protests by tens of thousands of people. Milosevic called for repeat elections where irregularities were found.

The opposition appealed the court rulings and boycotted the new elections.

On Sunday, the court in Nis ruled in favor of the opposition coalition, said Zoran Zivkovic, an opposition official. "Our truth has won," he said.

There was no immediate confirmation from the courts of the decision in Nis.

State-run media had earlier speculated that Milosevic might hand over Nis to the opposition in exchange for keeping control of the capital, Belgrade.

"We don't want any deals with Milosevic," said opposition leader Zoran Djindjic. "We will continue our protests till we get all our victories back and regardless of his concessions."

International officials have warned that the standoff between Milosevic and protesters was bringing Serbia toward a "major crisis."

Carl Bildt, the former Swedish prime minister, told European Union leaders meeting in Dublin on Saturday that "Serbia is headed for a major crisis," and backed opposition demands for more democracy.

His comments undercut the argument that Western countries must back Milosevic because he is critical to ensuring that Bosnian Serbs comply with the Dayton peace accords.

Bildt's deputy, Michael Steiner, said in Belgrade that it was important for Bosnia that its neighbors -- Yugoslavia and Croatia -- be democratic, too.

"The annulment of the elections is, of course, unacceptable, so this must be changed, and I think that the demands are absolutely legitimate," Steiner said.

Tens of thousands of demonstrators have taken to the streets every day for almost four weeks. About 200,000 people were in Belgrade on Saturday to demand that Milosevic to restore their victories.

Earlier Sunday, news media controlled by Milosevic accused demonstrators of being in the service of the United States, Germany and other foreign powers. Serbian TV, Milosevic's mouthpiece, showed demonstrators carrying large American and German flags and commented that this shows they are Western stooges.

The TV, which has been the main target of demonstrators' anger for its biased reporting, also carried numerous alleged letters of support for Milosevic from throughout Serbia saying he was "protecting the country's sovereignty" against American interference.

"Today, we have two Serbias," said opposition leader Vesna Pesic. "One is Milosevic's arrogant Serbia which wants to remain an isolated island in the democratic world." "The other is our Serbia, which is not afraid of the world and democracy," Pesic said. "And our Serbia is winning."

Opposition leader Vuk Draskovic traveled to Geneva on Sunday where he was scheduled to meet top U.S. envoy for former Yugoslavia John Kornblum. Last week, Kornblum refused to meet Milosevic in Belgrade.

- END QUOTE -