In October 1990, while the Bush administration was busily preparing Operation Desert Storm to expel Iraq from Kuwait, the Central Intelligence Agency presented another unpleasant surprise to U.S. policymakers.

Yugoslavia, the CIA predicted in a National Intelligence Estimate, would break apart within 18 months, with a high probability of touching off a bloody civil war. The main culprit in the coming crisis, the report said, would be Serbian President Slobodan Milosevic.

Among those receiving and concurring with the CIA forecast was Deputy Secretary of State Lawrence S. Eagleburger, who spent seven years as a U.S. Embassy attache and ambassador to Yugoslavia and who was the administration's highest-ranking expert on the subject. For the next 2 1/2 years, including five months when he was secretary of state after the departure of James A. Baker III, Eagleburger watched with dismay while the country disintegrated step-by-step and then descended to a depth of brutality unknown in Europe since World War II.

"We failed," Eagleburger conceded in an interview last week summing up the painful upshot of policymaking on the Balkans, which the Clinton administration has inherited as its top foreign policy priority. Eagleburger added that once the war was underway, "from beginning to end, to right now, I am telling you I don't know any way to stop it except with the massive use of military force." The use of large-scale force involving U.S. ground troops is one option that the Bush administration consistently rejected, and one that President Clinton is said to have discarded in the early discussions with his advisers.

The lessons of the Bush administration's unsuccessful efforts to halt the killing provide a starting point as the Clinton team struggles to define its policy in the Balkans and other war-wracked areas of the increasingly unruly post-Cold War world. Among the most important of the lessons, according to a variety of U.S. and European observers, are these:

By far the best chance to stop the Balkan bloodletting was close to its beginning, in the summer and fall of 1991. At that point, Eagleburger said, former national security adviser Brent Scowcroft and a variety of other officials, a relatively modest collective intervention by the United States and European countries, backed by threat or use of force, might have headed off the later disaster.

Such an intervention was not proposed at the time, however, and would have been difficult to promote here or in Europe before the disaster deepened. Surprisingly, the State Department's official chronology of developments in the war-torn former Yugoslav republic of Bosnia-Herzegovina does not start until March 1992 -- by which time the die there was cast.

Ruling out the direct application of force against Serbia sapped the strength of diplomatic persuasion. Several official observers said that once Milosevic and his Serb lieutenants began their campaign of intimidation and liquidation against other states of the former federation, they would have changed course only in the face of the credible threat of outside intervention.

After saying repeatedly that U.S. troops would not be used and after failing to obtain allied agreement even to enforce a "no-fly zone" over Bosnia, Bush in his last month in office threatened unilateral military action against Serbia to head off the spread of fighting to the Albanian-majority Kosovo province. In a letter delivered in late December to Milosevic and his Yugoslav army chief, Gen. Zivota Panic, Bush declared that "in the event of conflict in Kosovo caused by Serbian action, the United States will be prepared to employ military force against the Serbs in Kosovo and in Serbia proper."

Eagleburger said the Bush letter, which was carefully checked with Clinton before it was sent, was prompted by intelligence reports that Serbs might begin a reign of terror in Kosovo during the transition period in the United States. "If in fact anything had happened we were prepared to do what we had said -- that I promise you," said Eagleburger, adding this would have involved U.S. air attacks in Serbia. For whatever reasons, the war has not yet spread to Kosovo, although many officials predict it will do so and touch off a wider conflict involving Macedonia, Albania, Bulgaria and possibly Greece and Turkey.

The failure of the Bush administration to create a clear consensus in its own ranks or within the squabbling ranks of U.S. allies in Europe was a debilitating drag on decisions and action. "This was an eminently European affair, so Europe should have taken care of it; but Europe is immobilized psychologically and is dependent on the {United} States," said Bosnian Foreign Minister Haris Silajdzic in Washington last week. "The States were waiting for Europe to do something. And it all went to the United Nations, which of course is a catastrophe."

A dozen interviews with officials in London, Brussels, Bonn and the Hague produced expressions of frustration about Europe's inability to act either on its own or in concert with the United States, said Washington Post correspondent Marc Fisher. Every one of those conversations degenerated into finger-pointing, with former President George Bush, former secretary of state Baker and former West German foreign minister Hans-Dietrich Genscher repeatedly being singled out for blame, Fisher reported.

The diverse area of south-central Europe known as the Balkans gave rise to World War I after a Bosnian Serb student assassinated Austrian Archduke Ferdinand in Sarajevo. From 1945 to the death of President Tito in 1980, a unified Yugoslav federation was ruled with an iron hand by Tito, a communist dictator who won support from the West by splitting from Moscow.

After the end of the Cold War, deep-seated suspicions and conflicts came to the surface involving the often-dominant Serbs, predominantly of the Eastern Orthodox religion; the mostly Roman Catholic Croats; Bosnian Muslims, who are the largest communal group there; and several other national groups. As the federation crumbled, the Serbian-led Yugoslav army fought the Slovenes, then the Croats. Beginning last year, Serb fighters from inside and outside Bosnia terrorized and brutalized the Muslims with "ethnic cleansing" policies reminiscent of Adolf Hitler's persecution of Jews.

'Inadequate' Response

The U.S. response to the contemporary challenge in the Balkans and related areas "has been woefully inadequate: timid, reactive and unimaginative," Jenonne Walker, a former State Department official, wrote in last November's issue of Current History. Walker sharply criticized the Bush administration for being "unwilling to risk a single casualty in an election year" by refusing to provide even U.N. observers to monitor the Yugoslav crisis. She argued that the United States must provide ground troops to share the dangers of peace-keeping in such places as the Balkans if it is to be relevant to the security challenges of post-Cold War Europe. Walker has become senior director for European affairs on the staff of the Clinton National Security Council, where the future of U.S. policy in the Balkans is under debate.

The discussions within the Bush administration about how to respond to the disintegration of Yugoslavia go back to the immediate aftermath of the October 1990 CIA report. In contrast to their failure to pay attention to an increasingly dangerous Saddam Hussein after the Iran-Iraq war, administration policymakers were well aware of the Balkans developments, nearly all of which were predicted by U.S. intelligence before they took place. Dozens of Yugoslav-related meetings of the interagency "deputies committee" were held and top officials were kept abreast of daily developments.

The principal issue in late 1990 through mid-1991 was how to keep the increasingly shaky Yugoslav Federation from breaking up. "The mind-set in the administration was that the dangers of splitting were enormous in Yugoslavia," said a senior official, who added that Bush's policy of opposing the breakup of multinational states was affected by his determination not to complicate the efforts of then-Soviet President Mikhail Gorbachev to keep the Soviet Union together.

The U.S. position was dramatized when Baker traveled to Belgrade on June 21, 1991, warning Yugoslav leaders of the "dangers of disintegration" and announcing that the United States would not recognize secessionist republics. In retrospect, said a former U.S. intelligence official, the Yugoslav army took Baker's stand as a "green light" to use force against the breakaway states.

Less than a week after Baker's departure, Slovenia and Croatia declared their independence anyway. When Slovenian militia occupied its border posts, a 10-day war with the Yugoslav army broke out. Two months later much more serious fighting started between Croatia and Serbia.

These developments caught the world between the end of the Cold War and the start of serious international efforts to deal with civil wars. The 12-nation European Community, alarmed at fighting in Central Europe, sought to mediate between the Yugoslav parties but the cease-fires collapsed in rapid succession. EC policymakers fell victim to internal differences, based on conflicting historical ties and interests. At this stage NATO considered Yugoslavia a problem beyond its jurisdiction. The Conference on Security and Cooperation in Europe (CSCE) had no clear consensus on what to do. The United Nations was initially only peripherally involved.

After Baker's visit to Belgrade, Bush and Baker decided that the United States would not become deeply involved but would let the Europeans take the lead. The two Texans at the top of the U.S. government "thought it was a swamp" that Americans should avoid at all costs, according to a close observer of their policymaking. Consequently, the administration took a prominent role only episodically, when U.S. public reactions to televised horrors from the Balkans seemed to demand a U.S. response.

In retrospect, the early period of U.S. passivity may have been the last point at which the Balkans disaster could have been headed off, according to several top officials of the Bush administration. "Maybe right at the very beginning, had some force been put in along the Croatian-Serbian border, it's possible {the fighting} might have been stopped before it got going," said Scowcroft, who served as a U.S. military attache in Belgrade in 1959-61. "Once it got started, it's hard to see how you could have stopped it without massive force," Scowcroft said in a Jan. 19 interview with Washington Post editors and reporters.

Eagleburger said that as he looks back, "early coordinated, multilateral action might well have succeeded" had it involved the United States, Western Europe and the Soviet Union dictating the terms of the Yugoslav separation, including protection for minorities. This was not proposed by anyone at the time, Eagleburger said, because "we didn't have an agreement among ourselves {within the administration} on how important this was, how dangerous it was, and by the time it got dangerous there were these splits within the Western community."

The splits within Europe became more prominent in December 1991, when Germany, which had been historically allied with Croatia and has a sizable Croat minority, pressured the EC to recognize Croatia and Slovenia as independent states over French and British objections. The EC, in need of German approval of its Maastricht unity treaty, agreed to take the recognition step on Jan. 15, 1992 -- whereupon Germany announced unilateral recognition of the two states on Dec. 18.

Unilateral Action

Germany's decision to insist on recognizing Croatia and Slovenia is still among the most controversial episodes in the Balkan saga. "The question is not what effect recognition had, but whether the status quo in Yugoslavia could be maintained," Karsten Voigt, architect of foreign policy for Germany's opposition Social Democratic Party, said last week. "The main problem was that Baker and Eagleburger believed the status quo could be kept, and the Americans stuck with that for far too long.

"The German mistake," Voigt continued, "was when we recognized Croatia, we acted unilaterally and we did not press the Croatians to include minority rights for Serbs in their constitution. The American mistake was one of analysis. The German mistake was one of tactics."

Officially Germany admits no mistake. Foreign Minister Klaus Kinkel said last week that "the recognition of Croatia and Slovenia was not an alleingang {solo act}. Yes, we pushed for it, and rightly so. I can only say the decision was correct and necessary."

Washington, which was startled by sudden German activism, held off diplomatic recognition of Croatia and Slovenia until last April 7. At the same time, it also granted recognition to an independent Bosnia-Herzegovina, despite warnings from Serbian officials to Eagleburger that Bosnian independence "will mean war." Battles quickly erupted in Bosnia and "ethnic cleansing" began.

Originally, the White House had planned also to recognize Macedonia, another breakaway Yugoslav republic, at the same time as the others. But it backed off under heavy pressure from Greece and Greek Americans. In what has become a passionate political issue in Athens, Greece insists that the name Macedonia must not be used by the former Yugoslav state, maintaining that use of this Greek name encourages territorial ambitions against Greece. Heavy economic and political pressure has been exerted by Athens on the fledgling Macedonian republic, which is tenuously holding its own against Serb threats.

Greek Prime Minister Constantine Mitsotakis telephoned Bush and Greek Americans took their case to Scowcroft and Eagleburger. According to Andrew E. Manatos, a consultant and coordinator for Greek Americans, every member of Congress was contacted last spring on the Macedonia issue, and 40 senators and 141 House members signed a letter to Bush. Last Oct. 2, this view won new force when Clinton, in a special message to Greek-American voters, came out against recognition of Macedonia unless it changes its name.

After the November election, there was renewed discussion in the administration of recognizing Macedonia, despite continuing Greek opposition, because of Macedonia's nearly desperate economic and political plight and its strategic position in the Balkans. After a personal plea from Macedonian President Kiro Gligorov in a private meeting in Stockholm on Dec. 14, Eagleburger telephoned Baker, then White House chief of staff, and obtained his approval and that of Bush to back Macedonia's entry into the United Nations and the opening of a U.S. consulate as a first step toward diplomatic recognition.

Nonetheless, Scowcroft, who was not consulted at the time, later objected and blocked implementation of the decision on a technicality, according to U.S. and diplomatic sources. This left the Macedonia issue for Clinton to handle.

Early last year, U.N. envoy Cyrus R. Vance succeeded in negotiating a cease-fire agreement between Serbs and Croats in Croatia that lasted until a few weeks ago. Vance and his colleague, EC mediator David Owen, have so far been unable to stop the battles in Bosnia, the Serb siege of the Bosnian capital of Sarajevo, the horrors of "ethnic cleansing," or Serb-run detention camps. The recent Vance-Owen peace accord negotiated with Bosnian Serbs, Croats and Muslims -- but so far only accepted by Bosnian Croats -- would divide Bosnia into 10 quasi-autonomous provinces under a weak central government.

The Bosnian Serbs led by Radovan Karadzic receive much of their support from the government in neighboring Serbia led by Milosevic, whose passionate nationalism is blamed by many for fueling the conflict. On Dec. 16 Eagleburger, on a visit to the Geneva peace conference on Yugoslavia, launched a verbal attack on both Milosevic and Karadzic, as well as several other prominent Serbs and a few Croats and Bosnian Muslims, charging them with responsibility for war crimes.

A Boost to Milosevic

Democratic leaders in Belgrade said Eagleburger's charge, which came only three days before the Serbian presidential election, backfired by boosting Milosevic to a first-round victory against a challenge from Prime Minister (and California businessman) Milan Panic.

"Many Serbs said that if Eagleburger thinks Milosevic and {Vojislav} Seselj are war criminals, then they must be nice guys," Vuk Draskovic, the most important member of the democratic opposition in Belgrade, told Washington Post correspondent Blaine Harden. Seselj, who now controls a large bloc of votes in the Serbian legislature, called Eagleburger's attack "the secret to my success." In an interview with an Italian daily, Seselj said that coming from Eagleburger, the preelection attack was "a certificate of honor and patriotism."

Defending his statements, Eagleburger said he believes deeply that Serbian leaders should be held responsible for their actions and that his appearance in Geneva was the last chance for the Bush administration to express itself forcefully on this issue. While his speech probably helped Milosevic, Eagleburger said, "I don't think it changed the outcome of the election and I frankly don't give a damn if it did because I think it was important to do and I hope we'll do some more of it."

Eagleburger's appearance at the 20-nation Geneva peace conference illustrated the ambiguity of Bush administration policy. While Eagleburger was condemning the Bosnian Serb leader as responsible for war crimes, Karadzic was in Geneva to participate in negotiations at the request of international negotiators Vance and Owen. Eagleburger even passed Karadzic in the corridor of the old League of Nations building where the conference was held, but the two men did not speak.

Last week, Clinton's top advisers debated whether to use the Geneva negotiations or the threat of external force -- or some combination of those and other factors -- as the key to future U.S. policy in the Balkans. For the moment they refrained from endorsing the Vance-Owen plan, which critics charge would ratify Serb gains through "ethnic cleansing." The Clinton State Department, however, gave accused war criminal Karadzic a visa to New York to negotiate on the plan at the United Nations.