SISAK, Yugoslavia -- Yugoslav air force jets Tuesday reportedly attacked a Croat-held town in Croatia's disputed Banija area, killing at least one police officer and causing serious damage in escalating ethnic unrest that dimmed prospects for peace.
State-run Croatian radio quoted a military spokesman as saying the air raid was launched on Kostajnica because someone on the ground fired at the jets.
Yugoslav President Stjepan Mesic, the chairman of the Yugoslav collective head of state and its Croatian representative, said the attack was part of a strategy of Marxist-ruled Serbia to sabotage European Community peace-seeking efforts and realize a territorial expansion plan.
He repeated charges that elements in the federal military were supporting Serbia's alleged scheme to create a 'Grand Serbia' as Yugoslavia dissolves.
'In question is a conquering war where they do not hesitate to use any means and where individual military commanders cooperate with outlaws,' Mesic said on returning to the Croatian capital of Zagreb after walking out of a meeting in Belgrade in which political leaders failed again to arrange a truce.
Mesic said the attack on Kostajnica, 60 miles southeast of Zagreb, set a medical clinic, a secondary school and a kindergarten on fire.
Djuro Brodarac, the police chief in Sisak, the closest major town to Kostajnica, said that during the hour-long raid, two Yugoslav air force jets used 20mm canon to strafe the town, as well as either air-to-ground rockets or bombs. He said two homes were destroyed.
The raid came after Croatian police and militiamen in Kostajnica repulsed an assault by some 2,000 Serbian rebels, Brodarac said. 'This is the first time the Serbs and federal army have openly coordinated an attack,' he asserted.
Brodarac said at least one Croatian militiaman was killed and two others were injured.
The town is on the eastern edge of the Serbian-dominated Banija region. Local Serbs and the militia of the neighboring self-declared Serbian Autonomous Region of Krajina launched an offensive last weekend to control the area. Most of the 5,000 residents fled before the fighting, leaving a large number of Croatian police and militiamen holding Kostajnica.
The Serbs have gained control of a number of Banija towns and villages in battles that killed at least 30 people, and a senior rebel leader had said they planned to move on Kostajnica.
Croatia has accused the overwhelmingly Serbian federal military, which was assigned peace-keeping duties in the republic, of helping the rebels.
Other episodes of unrest persisted around Croatia, including a 10- round Serbian rebel mortar attack on the Croatian village of Borovo Naselje, in the disputed eastern Slavonija region, that set a school and a warehouse aflame, state-run Zagreb Radio said. No injuries were reported.
At least two members of the Krajina militia were killed and two were missing in a firefight with Croatian police in a village near the Adriatic coastal town of Sibenik, said Milenko Zelembaba, the police chief of Knin, the headquarters of the breakaway Serbian enclave.
Two men were killed and two others were injured when Croatian militiamen fired on a car that ran a checkpoint after being flagged down for not having its lights on, said state-run radio in the Adriatic port of Split.
The eight-member Yugoslav State Presidency met in Belgrade with republic and federal officials in a third attempt since July 22 to resolve differences over arranging a cease-fire. But the session collapsed because of a boycott by Croatian President Franjo Tudjman and the walkout by Mesic.
In a letter to the body, Tudjman said he was protesting 'an escalation of (Serbian) terrorism that is supported by the official authorities of Serbia and parts of the Yugoslav People's Army.'
Mesic left the session because the majority voted to appoint his Serbian vice president, Branko Kostic of Marxist-ruled Montenegro, as head of a special truce monitoring commission. The discussions were to resume on Wednesday, but it was not known if Mesic and Tudjman would attend.
The talks began a day after two presidency members -- Vasil Tupurkovski of Macedonia and Bogic Bogicevic of Bosnia-Hercegovina -- along with federal Prime Minister Ante Markovic and Foreign Minister Budimir Loncar attended a special EC foreign ministers meeting in Brussels on expanding the community's efforts to avert all-out civil war in the multi-ethnic Balkan federation.
The 12 EC ministers decided to send three foreign ministers to Yugoslavia on Aug. 3 for further discussions. They also said they would agree to a Croatian request to assign observers to the republic if a cease-fire could be worked out and the Yugoslav army and Croatian militia conducted joint patrols of ethnic hotspots.
But a potentially serious problem arose Tuesday, with the leader of Krajina, the largest of Croatia's rebellious Serbian enclaves, saying his 'government' would have to approve the 'presence and work of the EC monitoring mission.'
Milan Babic, the mayor of the western Croatian town of Knin and 'prime minister' of Krajina, also rejected the proposal for joint army-Croatian patrols, saying their entry into the enclave would be considered 'an act of aggression to which we shall respond in the only possible way.'