High Rep. Paddy Ashdown suggested Bosnia’s progress with economic, judicial and security reforms created basis for future EU and NATO recognition as viable state. EU may decide to launch Stabilisation and Association Agreement talks in May if cooperation with UN war crimes tribunal improves sufficiently. Former commander of Bosnian Muslim army Rasim Delic and former Republic of Srpska generals, Radivoj Miletic and Milan Gvero voluntarily surrendered to Hague tribunal.

Political situation in flux after December cabinet resignations after High Rep. Paddy Ashdown sacked 9 officials. Bosnian Serb president Dragan Cavic named Pero Bukejlovic, member of governing nationalist Serb Democratic Party, as next PM of Serb Republic. EU Council announced 31 January inclusion on list of visa restrictions (preventing entry into, or transit through, EU territory) of the 9 officials previously sacked by Ashdown.

Political crisis as Bosnian Serb PM Dragan Mikerevic resigned 17 December, followed by foreign and justice ministers, after High Rep. Paddy Ashdown sacked 9 officials to punish Bosnia’s Serb Republic for failing to arrest war crimes suspects. EUFOR took over from NATO 2 December in EU’s largest military operation to date.

Bosnian Serb authorities apologised 10 November to relatives of 8,000 Muslims killed by Bosnian Serb forces in 1995 Srebrenica massacre. Transfer of peacekeeping tasks from NATO to EU set for 2 December.

EU foreign ministers agreed 12 October to take over peacekeeping duties in Bosnia from NATO. 7,000-strong "Althea" force will replace NATO-led Stabilisation Force (SFOR) 2 December. Serbian Democratic Party lost ground to more moderate Alliance of Independent Social Democrats in 2 October local elections. Bosnian Serb president Dragan Cavic said Republika Srpska would freeze assets of ICTY fugitives Radovan Karadzic and Ratko Mladic. Police operation to arrest Bosnian Serb Gojko Jankovic, indicted by ICTY, failed 30 October.

Former Bosnian Serb Deputy PM Radoslav Brdjanin sentenced to 32 years by Hague war crimes tribunal 1 September. Forensic experts continue to unearth mass graves: 182 bodies found near Prijedor 24 September. More than 16,000 people remain unaccounted for. UNHCR announced 21 September 1 million refugees (45% of those that fled) returned to their homes. EU announced plans 17 September to replace NATO's peacekeeping troops mid- December with own "ALTHEA" mission. Religious leaders lobbying for nationalist parties, increased tensions ahead of 2 October local elections.

Forensic experts uncovered mass graves 10 August near ethnically-mixed municipality of Foca, 25 miles southeast of Sarajevo – believed to be victims of first wave of “ethnic cleansing” by Serb forces, ex- Yugoslav army and paramilitaries. NATO’s Stabilisation Force in Bosnia (SFOR) detained Milovan Bjelica, former associate of Radovan Karadzic, for second time 31 August.

Opening of reconstructed Old Bridge in Mostar 23 July attracted much regional and international attention. Destroyed by Croat forces in November 1993, bridge seen as symbol of reconstruction and reconciliation. Roman Catholic bishop, Ratko Peric, boycotted ceremony, demonstrating his continuing opposition to re- integration. Rajko Banduka, former aide to Ratko Mladic, arrested 23 July; Bosnian Serb leaders Mladic and Radovan Karadzic remain at large.

Final decision to pass control of NATO’s Stabilisation Force in Bosnia (SFOR) to 7,000 EU troops (EUFOR) by end of 2004 announced at Istanbul summit 28 June. Bosnian membership in NATO’s Partnership for Peace program rejected. Key preconditions for NATO membership - full cooperation with the Hague war crimes tribunal and arrest of war crimes fugitives - not yet fulfilled. High Rep. Paddy Ashdown dismissed 60 officials 30 June, including parliamentary speaker Dragan Kalinic and interior minister Zoran Djeric, on grounds of ‘obstructionism and corruption’. Police failed 26-27 June to locate war crimes suspects Stojan Zupljanin or Savo Todovic. Bosnian Serb government commission admitted Serb forces murdered thousands of Muslims in Srebrenica in 1995 - previously denied.

Head of Bosnian Serb special police dismissed over bungled attempt to arrest war crimes suspect Milan Lukic. Reports emerged that Lukic, targeted in raid, was providing The Hague with information on Radovan Karadzic, who remains at large.