BOSNIAN SERB LEADER OKS DEAL TO GIVE UP POWER.

Byline: Jane Perlez The New York Times

The Bosnian Serb political chief who led his people in a brutal war of ethnic separation, Radovan Karadzic, has agreed to immediately give up political power, U.S. envoy Richard Holbrooke said Friday.

The agreement removes an obstacle to this fall's national elections in Bosnia and could aid the flagging Dayton peace effort by removing from visible public life a man indicted for genocide and other war crimes.

But Holbrooke acknowledged that it fell short of the goal of removing Karadzic from Bosnia and putting him on trial at the Hague war crimes tribunal, something Western nations have long demanded.

The signed agreement was negotiated with President Slobodan Milosevic of Serbia, who in turned exerted pressure on the Bosnian Serbs.

``This is a minimal acceptable package,'' Holbrooke said. Only a few days ago Holbrooke had told Western and Bosnian officials that if Karadzic did not agree to leave Bosnia physically, the West would reimpose economic sanctions on Serbia. For now, Karadzic remains in his mountain hideaway of Pale, near Sarajevo, and the threat of sanctions has withered.

The Bosnian government and Western officials had considered Karadzic's presence as head of the major political party in the Serb part of Bosnia, and his control over the police, media and politics there, as serious obstacles to fair elections.

Still, Karadzic's hard-line nationalist colleagues remain in power and there is wide suspicion that he will continue to exert influence behind the scenes.

Holbrooke cautioned that in order for the Bosnian elections to be run successfully, the agreement - which was signed by Karadzic, his replacements in the Bosnian Serb power structure and Milosevic - had to be ``implemented correctly.''

In Sarajevo the news of the agreement was welcomed by the Bosnian government and removed their threat of boycotting the election if Karadzic remained in office. Ejup Ganic, the Bosnian vice president, said Karadzic's agreement would enhance the prospects of fair elections.

But Ganic said he remained concerned that Karadzic, whose campaign posters are plastered all over Serb-held Bosnia, would remain a powerful influence unless he was sent to The Hague.

In the agreement, Karadzic said he had handed over power as president of the self-styled Bosnian Serb republic to Biljana Plavsic, his equally nationalist deputy. Another loyalist, Aleksa Buha, replaces Karadzic as chairman of the Serb Democratic Party.

The one-page agreement, signed Thursday night, also stipulates that Karadzic will not appear in public or on radio or television - forums that Karadzic, a clever propagandist, has used to great effect.

Holbrooke said there was ``no guarantee'' that Karadzic would conform to the intent of the agreement, and suggested it was possible he could remain a strong behind-the-scenes influence.

But the envoy appeared hopeful that the dynamics of Bosnian Serb internal political rivalry combined with Milosevic's interest in avoiding reimposition of economic sanctions on Serbia could mean the end of Karadzic's power.

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Photo: Radovan Karadzic

May remain influential