We never fully understood why Milosevic decided to give Sarajevo to the Muslims. But in retrospect, the best… — Richard Holbrooke

To further weaken Pale, I proposed that the Dayton agreement include a provision moving the Bosnian Serb capital to Banja Luka. Milosevic seemed interested in this proposal but, to my surprise, Izetbegovic demurred. Even though he hated the leadership in Pale, he seemed to think he could work with them, especially his old associate from the Bosnian Assembly, Momcilo Krajisnik. Izetbegovic also saw value in keeping the capitals of the two entities close to each other so that Sarajevo remained the only important political center in Bosnia. He may also have feared that if the Bosnian Serb capital moved to Banja Luka, which is closer to Zagreb than Sarajevo, it would accelerate the permanent division of the country and only strengthen Tudjman. Whatever Izetbegovic's reasons for not wanting to close Pale, it was a mistake. The mountain town was solely a wartime capital, established by an indicted war criminal and his henchmen. It was the living symbol - and headquarter - of his organization. We should have pushed Izetbegovic harder to agree to establish the Serb capital at Banja Luka. It would have made a big difference in the effort to implement the Dayton agreements.

Months later, Roger Cohen would write in The New York Times that preventing an attack on Banja Luka was "an act of consummate Realpolitik" on our part, since letting the Federation [of Bosnia-Herzegovina] take the city would have "derailed" the peace process. Cohen, one of the most knowledgeable journalists to cover the was, misunderstood our motives in opposing an attack on Banja Luka. A true practitioner of Realpolitik would have encouraged the attack regardless of its human consequences. In fact, humanitarian concerns decided the case for me. Given the harsh behavior of Federation troops during the offensive, it seemed certain that the fall of Banja Luka would lead to forced evictions and random murders. I did not think the United States should contribute to the creation of new refugees and more human suffering in order to take a city that would have to be returned later. Revenge might be a central part of the ethos of the Balkans, but American policy could not be party of it. Our responsibility was to implement the American national interest, as best as we could determine it. But I am no longer certain we were right to oppose an attack on Banja Luka. Had we known then that the Bosnian Serbs would have been able to defy or ignore so many of the key political provisions of the peace agreement in 1996 and 1997, the negotiating team might not have opposed such an attack. However, even with American encouragement, it is by no means certain that an attack would have taken place - or, if it had, that it would have been successful. Tuđman would have had to carry the burden of the attack, and the Serb lines were already stiffening. The Croatian Army had just taken heavy casualties on the Sarva. Furthermore, if it fell, Banja Luka would either have gone to the Muslims or been returned later to the Serbs, thus making it of dubious value to Tuđman. There was another intriguing factor in the equation - one of the few things that Milošević and Izetbegović had agreed on. Banja Luka, they both said, was the center of moderate, anti-Pale sentiment within the Bosnian Serb community, and should be built up in importance as a center of opposition to Pale. Izetbegovic himself was ambivalent about taking the city, and feared that if it fell, it would only add to Croat-Bosnian tensions.

A remarkable challenge to Milosevic unfolded in the street of Belgrade in December [1996], led by three politicians who banded together in a movement called Zajedno, or the Together Movement. For weeks, hundreds of thousands of Belgrade citizens braved subfreezing weather to call for democracy. But Washington missed a chance to affect events; except for one ineffectual trip to Washington, Zajedno had no contact with senior American government officials, and the Administrations sent no senior officials to Belgrade for fear that their visits would be used by Milosevic to show support. For the first time in eighteen months, Milosevic felt no significant American pressure, and turned back towards the extreme nationalists, including Karadzic, for support. His tactical skills saved him again, and within weeks, the Together Movement was together no more, as its leaders split among themselves.