By R. Jeffrey Smith
Washington Post Foreign Service
Thursday, October 8, 1998; Page A27

BELGRADE, Oct. 7—For the past three days, Yugoslav President Slobodan Milosevic has been strikingly defiant about the continued presence of thousands of his security troops inside the Serbian province of Kosovo, insisting that he was not worried about NATO's threat to bomb Yugoslav military targets unless more of the troops are withdrawn.

Under the most optimistic view expressed here by a few Western diplomats, airstrikes would finally propel Milosevic to grant meaningful concessions on Kosovo -- perhaps even do him a favor by enabling him to adopt a softer and more pragmatic policy while providing an excuse that he was forced to do so at gunpoint. This view holds that popular anger provoked by a military confrontation might eventually be turned against Milosevic and weaken his political standing.

A Combative Leader For years, Yugoslav President Slobodan Milosevic has defied Western pressure to compromise. It took four years to settle the Croatia dispute and almost as long to reach a settlement in the Bosnian war. In the current Kosovo crisis, Milosevic again is resisting Western arm-twisting on autonomy for the province. BOSNIA When Bosnia declared independence in 1992, the Serb minority in the Muslim-dominated republic rebelled. Milosevic supported the Serbs. After a 3A-year communal war, Bosnia was refashioned into a federal state comprising a Muslim-Croat federation and a Serb republic. CROATIA Declared independence in 1991. The Krajina region -- the only region in Croatia with a Serb majority -- declared its own republic and, with the military support of Belgrade, occupied one-third of Croatia. In August 1995, the Croatian army launched an offensive that destroyed the Krajina republic, sending thousands of Serbs fleeing to Serb-held areas of Bosnia or to Serbia. KOSOVO In 1989, Milosevic, then president of Serbia, stripped ethnic-Albanian-dominated Kosovo of self-rule. Two years later, separatists declared the Republic of Kosovo, recognized only by Albania; occasional clashes occurred between Serbian police and separatists. Last February, the Yugoslav army launched a bloody crackdown on separatist militia forces.

But many intellectuals, dissidents and businessmen here say that NATO airstrikes are even more likely to produce the opposite effect, by provoking a wave of nationalism and political repression that would strengthen Milosevic and further undermine his already weak domestic opponents. Leaders of Milosevic's ruling Socialist Party, for example, have said they will respond by enacting a formal state of emergency that would bar most independent political activities.

"It will provide the instrument [Milosevic needs] for the final extermination of the last islands of opposition," said Miodrag Perisic, vice president of the Democratic Party, one of the oldest and largest independent parties here. "Democratic processes in Serbia would be postponed for a long time."

Mladjen Dinkic, a popular dissident economist who teaches at Belgrade University, said he agrees that a NATO attack could be disastrous for liberal reformers. "They will use the bombing to introduce an even stronger dictatorship. Everything with the word 'foreign' could be quite dangerous. It may not be possible, for example, to teach anything about foreign investment," a topic the country's economic leadership desperately needs to understand better, Dinkic said.

NATO is threatening airstrikes against Yugoslavia because of a seven-month government crackdown on ethnic-Albanian separatists in Kosovo, a province of Yugoslavia's dominant republic, Serbia.

Signs of deep anxiety among Milosevic and his colleagues about the possibility of military action are everywhere here in the capital. A short film depicting vigilant soldiers and naval vessels was broadcast tonight before the evening news on state television, accompanied by a soundtrack of patriotic music. Last week, the deputy prime minister threatened political repression after any bombing. Posters have been plastered throughout the city declaring that "traitors will be treated properly."

Socialist Party lawmakers have said they are prepared to force the shutdown of any television or radio station that rebroadcasts reports by such Western news agencies as the BBC and the Voice of America about the Kosovo crisis. And rumors are swirling that Milosevic's son Marko, a wealthy local businessman, flew to safety today on a foreign airliner.

Thus far, Milosevic's usual strategy toward the West -- belligerence, followed by eventual grudging acquiescence, and, according to critics, failure to follow through on his agreements -- has succeeded in this autocratic state, which has been politically and economically isolated from Europe for the past seven years.

After a decade in power -- as president of Serbia until 1997, then as Yugoslav leader -- Milosevic has no serious political opponents and has yet to encounter any substantial domestic criticism for orchestrating a seven-month military campaign against ethnic Albanians in Kosovo that the rest of the world has condemned for its brutality.

"It is a natural state for him to be defiant. He can only rule in a state that is not in normal conditions; he cannot function in peace," said Veran Matic, editor in chief of B92, a popular independent radio station in Belgrade.

"It's absurd nonsense," said Ivan Stambolic, whom Milosevic ousted as president of Serbia in 1987. "For his power to keep getting stronger, he must always create a crisis. This pathetic romantic nationalism is the foundation on which he is standing. At the end it must be destroyed, but nobody knows when."

This week, Secretary of State Madeleine K. Albright described Milosevic as "someone we never trusted." But since 1995, when the Clinton administration anointed him as the most important guarantor of the Dayton agreement ending Bosnia's bitter ethnic conflict, Milosevic has nonetheless been the politician that Washington has consistently depended on to contain instability in the region.

Milosevic has come to depend on his regular contacts with Washington for reinforcement of his importance, a senior diplomat here said. "He complained to me, 'The Americans tried to dislodge me in 1997 [during national protests over Milosevic's refusal to honor the results of local elections]. Me! Can you imagine? I'm their only ally, the only person who understands these [Balkan] people,' " the diplomat said.

In the view of several U.S. officials who have dealt with him extensively on matters concerning Bosnia and Kosovo, however, Milosevic's claim to a heartfelt belief in Kosovo's historical and cultural importance for Serbia is largely political bluster. Instead, they say, he is nearly devoid of political ideology and motivated almost entirely by a desire to maintain his grip on power.

"He rose to power by taking the rights of the ethnic Albanians away," said a U.S. diplomat, referring to a 1989 action that stripped the province of political autonomy within the old Yugoslav Federation and forced thousands to resign from government jobs that were then turned over to Serbs. "This is more important to him than Bosnia," the diplomat said, because his political support is heavily drawn from nationalists who have insisted that Serbs maintain rigid control in Kosovo.

So far, Milosevic also has been able to exploit divisions in the West over how much pressure to apply to Yugoslavia, said Zarko Korac, a dissident who teaches psychology at Belgrade University. "He has this uncanny ability to see weakness in others. . . . He knows that Europe is not going to do much to help [ethnic-Albanian] Muslims. He is not stupid."

What bothers Milosevic most about the prospect of NATO intervention is the uncertainty about its political impact, a Western diplomat said. "There is a sense of fear and tension here manifesting itself in nationalist bravado" and new threats of violent retribution against those who fail to follow the party line on NATO and Kosovo.

Deputy Prime Minister Vojislav Seselj, head of the Serbian Radical Party, which Milosevic asked to join his governing coalition early this year, said last week, for example, that "if we cannot grab all their [NATO] planes, we can grab those within reach, like various Helsinki committees and quisling groups." Milosevic never disavowed his remark.

Perisic, the Democratic Party official, said the atmosphere in Belgrade already is beginning to turn ugly. After he called for Milosevic's resignation in a parliament speech last week, he said, someone drove up to his car in traffic and warned him to "take care because you could be killed by a bomb."