SARAJEVO (Reuters) - A Western envoy said on Wednesday he would suspend his authority over a disputed Bosnian district sandwiched between two feuding regions, in the latest attempt to slowly scale down international involvement in the strife-torn country.
After the Dayton peace accords ended Bosnia's 1992-95 war and divided the country into the Serb Republic and the Muslim-Croat federation, both regions claimed Brcko.
An arbitration panel put the district under international supervision in 1999 and ruled it should be owned equally by the two regions.
That supervision had been due to end three years ago but has stayed in place because of continued tensions between the communities.
"I made the decision today to suspend my authority as the supervisor for Brcko," U.S. diplomat Roderick Moore told a news conference, saying his office would close down by August 31.
Moore said the suspension did not mean he was finally terminating his authority over the region.
His legal status as the supervisor would remain unchanged after August, and the international tribunal for Brcko would remain in place until all terms for its closure have been met, as potential safeguards in case the political situation worsened.
Analysts said the decision was a compromise to placate both the Serbs, who want the supervision to end, and the Muslim-Croats, who want it to stay, fearing the Serbs will secede and take Brcko with them.
"It's a good decision, because it puts into focus the responsibility of local leaders not only in Brcko but also in the Serb Republic and the Muslim-Croat federation, while leaving the safeguards in place," said Srecko Latal, an analyst with the International Crisis Group (ICG) think-tank.
Moore said that his decision was based on "impressive results" achieved in the district over the past 15 years, such as the establishment of a multi-ethnic government, the high rate of refugee returns and an integrated education system.
Brcko has been hailed as an example for the rest of the ethnically-divided country but observers say it has been plagued by the crime and corruption.
"With its strategic position on the Croatian border and as the vital corridor between the Serb Republic and Serbia, Brcko may become a paradise for organized crime and pose a long-term danger for the region," a Western diplomat said on condition of anonymity.
Moore said the international body supervising Bosnia's peace supported his decision, with exception of member country Turkey.
Bosnia's two autonomous regions co-exist in an uneasy alliance under a weak central government, and their rivalry has blocked economic and political reforms in recent years.
Reporting By Daria Sito-Sucic; Editing by Andrew Heavens