The United States and 40 other nations pledged at a special summit conference today to work for stability and prosperity in the Balkans after a decade marked by unrelenting war. But President Clinton made it clear there is one government in the region he would like to destabilize: that of President Slobodan Milosevic in Yugoslavia.

Clinton, in his second trip to this war-scarred city in three years, embraced a pledge by countries participating in the summit conference "to work together toward the full achievement of the objectives of democracy, respect for human rights, economic and social development and enhanced security."

"We reaffirm our shared responsibility to build a Europe that is at long last undivided, democratic and at peace," said a communique issued at the close of the two-day gathering.

But on his own later, Clinton stepped up his encouragement to Serbs to oust the leader who in 1992 helped ignite the war that devastated Bosnia and who, more recently, tried to repress an uprising by ethnic Albanians in Kosovo with the most brutal tactics Europe has seen since World War II. Speaking at an ethnically diverse high school in Sarajevo, the president reminded residents of Serbia, the dominant republic in Yugoslavia, that they can expect no postwar help from most industrialized nations until Milosevic is gone from office.

In a demonstration of that policy, Milosevic was pointedly left off the invitation list for today's summit conference, called to endorse the Stability Pact for South Eastern Europe. Although some countries differ, the United States and its closest allies have vowed that Serbia will also be left off the list of countries receiving aid in a European-led reconstruction campaign kicked off Wednesday in Brussels with pledges of $2 billion for ethnic Albanian refugees returning to Kosovo, a province of Serbia.

"I hope that before long Serbia, too, will participate in this economic reconstruction," Clinton told several hundred people who received him warmly at the school. "But I do not believe that we should give reconstruction aid to Serbia as long as it rejects democracy and as long as Mr. Milosevic is in power."

Clinton did not specify how the Serbs should rid themselves of Milosevic, but one of his top advisers refused to rule out a violent overthrow. National security adviser Samuel R. "Sandy" Berger, asked by reporters if Milosevic should be ousted "even if it means civil war," replied: "Well, I think there are many democratic forces, many opposition leaders in Serbia. . . . It's not for me to prescribe to the Serbian people how they handle and change governments."

The Clinton administration repeatedly has signaled its desire to see Milosevic replaced as Yugoslav president, declaring the Balkans cannot expect peace and prosperity until the danger he presents is removed. Washington hailed his recent indictment for crimes against humanity in Kosovo and has offered encouragement and financial support--another $10 million was announced today--to opposition groups in Belgrade, the capital of both Yugoslavia and Serbia.

"Serbia will only have a future when Mr. Milosevic and his policies are consigned to the past," Clinton said in a written statement issued here. "Therefore, the best way to express our concern for the people of Serbia is to support their struggle for democratic change."

National Security Council spokesman P.J. Crowley said the day's events "absolutely" were designed with an eye toward prompting Milosevic's fall from power. He said Clinton met with Milo Djukanovic, president of Montenegro--the smaller, Western-leaning Yugoslavian republic--in part to hold him up as an example of an alternative to the type of leadership Milosevic has shown.

"We're going to be actively working with those who want a democratic Serbia, as are other countries," said Berger in his briefing.

President Martti Ahtisaari of Finland, who currently holds the European Union's rotating presidency and was a key player in ending the Kosovo war, opened today's summit by urging the Balkan nations to make peace within and outside their borders.

Despite lofty speeches by leaders vowing to help economic and political reform, however, Japan and most of the western countries made few concrete pledges of long-term aid to the region, which includes Albania, Romania, Bulgaria and Yugoslavia's former and current states. Participants privately noted that southeastern Europe, in addition to the threat presented by Milosevic, has big barriers to overcome, including the hatred that still burns among recently warring ethnic groups.

They also noted the region's wide economic disparity, ranging from Slovenia, which may be poised to join the European Union soon, to impoverished nations such as Albania and Macedonia. These two countries--which absorbed almost 800,000 Kosovo Albanians fleeing the Serb-led campaign of expulsion and terror that coincided with NATO's 78-day bombing campaign--feel entitled to economic and political rewards, but remain distant from the requirements for entry into the wealthy West European club.

Clinton announced several U.S. initiatives, including lower tariffs on Balkan exports such as shoes. The plan would require congressional approval and cost the United States about $80 million over five years. The president also pledged $150 million in new investments through the Overseas Private Investment Corp. and $130 million in new aid to be handled by the European Bank of Reconstruction and Development.

If the summit was light on details, it was heavy in symbolism, as world leaders advocated peace and stability in a city known for chaos. The gathering took place at the recently rebuilt Zetra Stadium, not far from the corner where a Serbian terrorist assassinated Austrian Archduke Ferdinand in 1914, triggering World War I.

The stadium was built for the 1984 Winter Olympics. Like so much of Sarajevo, however, Zetra was devasted by Serbian shells that rained from surrounding mountains during the four-year war that began in 1992 and killed thousands, pitting Bosnia's Muslims, Croats and Serbs against one another.