RUMORS SWEPT the Yugoslav town of Knin last month that civil war had broken out. People broke into local armories, seized weapons and actually began firing them before they realized that the rumors were false. The significance of this episode is that, while they were false, these rumors were very plausible to the people who live there. Rising ethnic and regional friction has brought Yugoslavia close to civil war. If fighting were to start between Serbs and Croats, would anyone intervene to stop it? Who?

The Cold War enforced peace and maintained stable boundaries in Europe, although at enormous cost, for 45 years. Now that it is fading, the old ethnic rivalries and hatreds are reappearing with astonishing vehemence. Europe has not yet begun to devise a new instrument capable of doing by law and adjudication what the Cold War did by brute force.

The town of Knin is the kind of place where trouble could easily start. It's an enclave of ethnic Serbs in the province of Croatia, which is now sharpening its political challenge to its larger neighbor, the province of Serbia. In elections last spring the Croats threw out the Communists and installed a stridently nationalistic government that is pressing for Croatian sovereignty in a loose Yugoslav confederation. Serbia is meanwhile moving toward elections later this year, and the Communists seem to have taken the lead with a campaign appealing no longer to Marxism but to the most extreme kind of Serbian nationalism fanning up all the old grievances. Some of them involve provincial boundaries.

Saddam Hussein's complaints about the historic injustice of the Kuwait border have their echoes at dozens of places in the Balkans. The danger of open warfare in Yugoslavia is now reaching a point requiring other European governments to begin thinking carefully what they would do -- if.