Karadzic may be trying to cross into Serbia

"We have not arrested Karadzic. The operation is over," police spokesman Dragomir Peric told AFP.

Nato-led S-For troops said its soldiers had a small role in the operation.

Mr Karadzic is wanted by the war crimes tribunal in The Hague to face genocide charges stemming from the Bosnian war in the 1990s.

S-For has been making increasing efforts to find Mr Karadzic and his supporters before it hands over its mission to a European Union force by the end of this year.

In less than two years, it has carried out four operations to arrest him. All of them have failed.

Border watched

Bosnian Serb police chief Radomir Njegus told local media that his forces had been conducting an operation in the area of Bratunac, near the border with Serbia.

He said special forces had surrounded the region.

They had received information that Mr Karadzic was planning to cross the border, he added.

Witnesses told AFP news agency that S-For troops had been observing the border from hills outside the town.

Correspondents say the Bosnian Serb Republic, which along with the Muslim-Croat federation makes up post-war Bosnia, has never arrested a war crimes suspect.

But the entity is under intense pressure to capture Mr Karadzic, as Bosnia seeks closer ties with Nato and the EU.