Powell: Still to decide whether Yugoslavia gets aid

Last week, Yugoslavia's failure to meet a deadline to handover indicted war crimes suspects triggered a freeze on $40m of US aid, pending a final decision by US Secretary of State Colin Powell.

Among those the Hague tribunal wants to see handed over are Serbian President Milan Milutinovic and the Bosnian Serb wartime General, Ratko Mladic, who is believed to be hiding out in Yugoslavia.

Divisive issue

A BBC correspondent in the region says the Yugoslav Government is deeply divided over the handing of war crimes suspects.

Nationalists, including Yugoslav President Vojislav Kostunica, insist a law on co-operation with the tribunal must be in place before they will consider handing over any suspects.

That law needs the backing of the Montenegrins who were, until this weekend, withholding their support.

Yugoslav President Kostunica has been highly critical of the tribunal

But the speaker of the Yugoslav parliament, Dragoljub Micunovic said on Saturday the rival factions had "agreed in principle on the law on co-operation with The (UN) Hague Tribunal".

Pragmatists within Yugoslavia's government support co-operation with the tribunal, seeing it as a necessary evil in order to unlock international aid.

Last week, the Serbian Government also adopted a new decree on arresting war crimes suspects.

The US special envoy on war crimes, Pierre-Richard Prosper, warned during an unexpected visit to Belgrade on Friday that Yugoslavia stood to lose further aid if it did not begin the handover of indicted people.

New handovers

The Yugoslav cabinet also agreed to co-operate with the tribunal, though only after the 31 March US deadline had already passed.

"The federal government decided unanimously... to co-operate fully with the tribunal and to demand all state organs to also co-operate fully," said Foreign Minister Goran Svilanovic.

Asked if the move meant new handovers, he said: "Yes, I think that after such a decision all state bodies are obliged to cooperate with The Hague, which means... to arrest those accused of war crimes and transfer them to The Hague".

The cabinet also agreed to open up access to government archives. That is expected to strengthen the case against former Yugoslav President Slobodan Milosevic, currently on trial in The Hague on charges including genocide.

The arrest of Mr Milosevic last year was also triggered by a US aid deadline.