For months now, the small republic of Montenegro has been the next explosion waiting to happen in the Balkans.

As the Kosovo war came to a close in early June, many thought the pro-Western Montenegrin government was sure to clash with Serbia, its dominant partner in the uneasy Yugoslav federation headed by President Slobodan Milosevic. But it has not happened yet. And last week--in a strangely significant way--people here began to think it might never happen.

The Montenegrin government of President Milo Djukanovic, which had already infuriated Serbia by declaring neutrality during the NATO-Yugoslav war, presented Belgrade Thursday with a plan to redefine the relationship between the sister republics, abolishing the federal entity called Yugoslavia and creating, instead, a union of two equal states with separate defense, foreign policy and monetary structures.

The immodest proposal would amount to independence covered with the barest constitutional fig leaf. But that may be enough to placate Europe and the United States, who say they oppose a change in Yugoslavia's borders. More immediately, it may also assuage Milosevic's supporters in Montenegro, who believe in continued union between Serbia and Montenegro but may be willing to settle for the fig leaf version.

"The document is quite radical, and more radical than I expected," said Ljubisa Mitrovic, editor in chief of the independent newspaper Vijesti. "But it didn't cause the wild reaction [everyone] expected."

Milosevic has not responded officially. The Djukanovic government has given Belgrade six weeks to approve the plan; failing that, Montenegro will hold a referendum on full independence, which a majority of voters support, government leaders said.

"We don't want this platform to seem like an ultimatum, and we want to preserve our union--but based on new principles," said Montenegrin Prime Minister Filip Vujanovic in an interview today at his vacation villa on the Adriatic coast. "It's interesting that Milosevic has not reacted. In this, I see encouraging signals and maybe he is in a mood to talk. But you never know with Milosevic."

Within Montenegro, the response of Milosevic's long-time allies has been muted. Leading figures in the opposition People's Party, which has supported Milosevic's policies and is part of the ruling federal coalition, said the plan should not be rejected automatically.

"The document is confusing, but it could be a basis for talks," said Vuksan Simonovic, a People's Party member of the Montenegrin parliament. "What it's all about, one cannot see clearly . . . but we are ready to talk."

Through the recent war, the presence of 20,000 Yugoslav army troops in Montenegro led to fears here that Milosevic would launch a coup, triggering a civil war between the army and 15,000 well-armed Montenegrin police loyal to Djukanovic. And last week Serbian hard-line politician Vojislav Seselj threatened army intervention if Montenegro moves to secede from Yugoslavia.

But observers here say Milosevic is too weak politically to start another conflict, and they question the Yugoslav army's willingness to take up arms against fellow Serbs--even if they are in Montenegro. "It's not that simple for the army to act against the people," said Mitrovic. "Montenegrins are not Albanians."

Vujanovic added, "I think the risk of a coup d'etat is over. [Milosevic] had his chance during the war, but it is clear the army does not have the internal strength for a coup. The great majority of officers do not want to destroy civil authority in Montenegro."

Montenegro, once an independent kingdom, has a distinct history from Serbia, but many of its population of 640,000 continue to think of themselves as Serbs who also have a strong identity as Montenegrins. The republic's political, economic, cultural and family ties with Serbia run deep. Some observers here say the move to sever links with Serbia is driven not by a true nationalism, but rather by antipathy toward the current Belgrade leadership.

"If 10 years ago democratic forces had come to power in Belgrade, such a radical document would never have happened," said Mitrovic. "It's a consequence of years of emptiness in the politics of Yugoslavia. There is a sobering up among the people . . . even among Milosevic's supporters here. Just a month ago they would have reacted very differently to this document."

Vujanovic said, however, that even if Milosevic falls, the separation will still be essential. "This document is the last chance to preserve a union, no matter who is in power," he said. "And we don't have time for the government in Serbia to change."

In the village of Golubovci, a People's Party stronghold just outside Podgorica, the capital, there is still enormous bitterness over the recent war and anger at Djukanovic's pro-Western stance. But there is also growing exhaustion at the price Yugoslavia has had to pay for Milosevic's policies. Residents interviewed seemed eager to distance the interests of Montenegro and its ties with Serbia from the personality of the federal president.

"We can discuss the relationship [with Serbia], but separation--never," said Veljko Kaludjerovic, a community leader. "We are related to our brothers in Serbia. We are Serbs. Milosevic and Djukanovic--these are just temporary people, but the union of Serbia and Montenegro is something that cannot end. If it was up to me, Milosevic and Djukanovic should both go. Yugoslavia existed before Milosevic, and Yugoslavia will exist after Milosevic."