BULLET cartridges stills litter the pavements' close to the front line in the Bosnian city of Mostar. Just 200 metres away, and surrounded by apartment blocks reduced to ruins by years of war, is the lavishly refurbished Hotel Ero, from which the European Union has tried for nearly two years to unify this divided city.

But Hotel Ero, referred to as "Spaceship Ero" by cynical Western aid workers, is just one of many contractors in Mostar. EU bureaucrats, some still in sports gear after coming straight from the nearby tennis club, sip drinks and choose from a multi lingual menu. A notice on the hotel door lists the people who are allowed to carry firearms in the building others must leave them at reception.

And on both sides of the city, hundreds of newly opened cafe's are swamped by young men sitting drinking coffee in the sun. Meanwhile, Spanish FOR soldiers dig drains and fix damaged water pipes, surrounded by shelled buildings, some with gaping holes, others peppered with shrapnel.

Mostar has been under EU administration since July 1994 and has received 144 million Ecus (£112 million) in non repayable aid from the Union. No other area of Bosnia will ever receive international aid on this scale. But this special arrangement, which was agreed as part of the Dayton peace accord, has a political motivation.

Mostar is crucial to the credibility of the US brokered Muslim/Croat Federation which is supposed to be a counterweight to Serb power in post war Bosnia. When war started in the city in 1992, Muslims and Croats fought together against the Serbs, but a year later, after defeating the Serbs, they fought each other in a fierce civil war which ended in March 1994. There have been killings as recently as January of this year. In many cases people know who killed their friends and relatives, and everybody agrees that there is a deep hatred here. The city is also awash with arms. This combination could prove fatal for the federation, and hence the whole peace process.

Mostar is now completely divided Croats and Muslims use different currencies and have their own mayors and local authorities. There are even different car registration plates on east and west, and very few people, especially men, ever cross to the other side. And, despite 22 months of EU administration, the basic aim of which was to unify the city politically, there are few indications that the two sides want to work together.

The door of Hotel Ero is constantly guarded by an assortment of policemen, each wearing a different uniform and looking slightly uncomfortable in each other's company. Among the members of this so called "joint patrol" is a Croat from west Mostar and a Muslim from the east side. But there is also a policeman from a European Union country, a Muslim from Sarajevo, and a Croat from Zagreb, in an attempt to bridge the gap between the two.

WEU police chiefs describe this has "a binding process across more acceptable boundaries", and admit that it doesn't make for very effective policing when on patrol the five policemen travel with an interpreter in white mini buses.

Eight joint patrols now go out each day and set up checkpoints, "but in reality whatever policing is done in the city is carried out by the different forces on either side. Mr Steve Jordan, third in command of the 182 member WEU police force in Mostar, describes these patrols "as a cosmetic manifestation of a joint police force beginning to form".

Bout whether Mostar will ever shave a unified police service is very much in doubt. Since the start of the EU administration a joint police headquarters was planned. Palatial new offices, complete with marble floors and classy, western style furnishing, opened on April 22nd, but despite previous assurances the Croats have refused to move in with their Muslim counterparts.

Citing legal difficulties as the reason, it is generally seen as a political decision. To date the Croats have been far from co operative in attempts to unify Mostar, and heir actions here will tell a lot, not just about the intentions of Croats n Bosnia but also of those of their patrons in Croatia itself if they want a strong Muslim Croat federation or if ultimately they intend to $ reassert Croatian power after the year long NATO intervention, and make Mostar the capital of their part of a carved up Bosnia.

Since the start of the war the Croatian position in Mostar has greatly strengthened. In 1991 the city was completely integrated and populated equally by people from each ethnic background Serbs, Croats and Muslims. Now it is estimated that Serbs account for only 3 per cent of the population, and these are mainly people in mixed marriages.

There are currently no definite figures for population breakdown. EU officials give estimated figures based on a survey carried out in November 1994. From this they believe the population, which in 1991 was 127,000, has fallen to 60,000, and that of these only 45,000 originally lived in Mostar, the remainder being displaced from other parts of Bosnia. But what is clear is that Croatians are now in a majority, and that their side, the west, is thriving and relatively undamaged compared to the devastated east.

The Croat deputy mayor, Mr Mile Puljic, dressed in plum jacket and matching tie, is at pains to point out that across the confrontation line in Mostar begins a "different" civilisation, which he dismisses in the same breath as Islamic extremism. "We belong to a European, Christian civilisation, whereas the east is under the influence of Islamic states," he says.

But neither is he particularly enamoured of the role being played by the EU. "I can honestly say we don't like any administrator. Here on the Croatian side, we didn't really need the EU. They have repaired schools and we did get one share of the cake, but we could haven done it without them, as we've all ways had links with Croati.

On unification, he is far from enthusiastic. "We want one city, but only if it is based n economic interests, in terms of infrastructure trade and industry. We would want our own administration and the Muslims can have their own administration. It is not very human to force people who have been at war to live together."

But Croatian intransigence is just one of many problems facing the EU administration, which is also out of favour with the Muslims as a result of a series of events which led to the resignation in February of the original EU administrator, Mr Hans Koschnick of Germany.

He had drawn up a boundary map for the city with three Croat districts, three Muslim districts and a mixed central area, a symbol of ethnic reconciliation. But this mixed zone enraged the Croats. Hotel Ero was stormed by a mob of youths and Mr Koschnick was attacked in his car. Croat police did not intervene. Ten days later the map was changed at the Rome summit, making the central zone significantly smaller.

Mr Koschnick, who had previously survived two assassination attempts by Croat gangsters, resigned the following week, and was succeeded by a Spaniard, Mr Ricardo Perez Casado.

The resignation was a blow for morale at EU headquarters. Off the "record, officials admit they have,"lost face and say that Mr Koschnick was put in an impossible situation.

And now the administration has run into new problems. Elections which were planned for May 31st are likely to be boycotted by Muslim parties, which are insisting that all refugees from the city, even those living in foreign countries, must be allowed to vote. They say more than 20,000 Muslims have left Mostar since 1991.

The Muslim mayor, Mr Safet Orucevic, says "The elections cannot go ahead until all the people who were in Mostar in 1991 can vote. Otherwise we would be legal rising ethnic cleansing and ethnic-genocide and we will not allow that."

EU officials say the Dayton agreement on Mostar, which was signed by Mr Orucevic, made no provision for allowing people to the outside the city, but he argue the final agreement signed at Dayton which says all refuge the can't vote, overrides the earlier agreement.

In the EU headquarters it had admitted there were contradictions in the various documents signed at Dayton, but election organisers say they are going ahead on the basis that only those people registered in Mostar in 1991, and who are in the city on election day, can vote But if the Muslims go ahead with theirs boycott, which is likely as all the main parties have committed them a selves to it in newspaper and TV reports, then the elections wills achieve little.

So while the EU administration can congratulate itself on resupplying water and electricity, building, schools and community centres, and even the first new concrete bridge across the river Neretva linking east and west, in the political arena failure is staring it in the face as the two year mandate nears its expiry date of July 23rd.

But Mr Ricardo Peres Casado insists he is optimistic, saying they are getting closer to unification day. "Those who were expecting complete reunification after this, war should remember how long it took for real reconciliation after the" second World War or the Spanish Civil War. It is always a slow process. Our policy as members of the EU is to help to shorten that time."

But on the streets of Mostar, you do not see signs of two communities coming together, but rather signs of two communities asserting their distinctive cultures and religions. On the east side, powerful loudspeakers have been erected on reconstructed mosques to announce the Muslim hours of prayer. The muezzin's call can now be heard all over the city centre. And in the supposed central "mixed" area, Croats have already dug the foundations for a huge Catholic cathedral.

The EU mandate may yet be extended. This will be decided by foreign ministers in June. Meanwhile, all but the most optimistic would conclude that EU plans for a unified city, like the uniform that has been purchased at a cost of DM300,000 (£126,000) for the yet to be formed unified police force, will be assigned to the realm of well intentioned dreams.