PRESIDENT Slobodan Milosevic's offer of mediation by the Organisation for Security and Co-operation in Europe (OSCE) in the dispute over Serbia's local elections could lead to new elections under international supervision.
In a separate move Mr Milosevic last night offered the opposition a parliamentary debate on the situation, but this was unlikely to impress his opponents who have been boycotting parliament.
Mr Milosevic's offer on OSCE mediation was made in a letter to the US Secretary of State, Mr Warren Christopher, in which he not only denied being involved in the annulment of the local elections but described the nightly protest marches in Belgrade as "undemocratic".
The protests have drawn up to 200,000 people, and while numbers have been falling in recent days they have still been very large by international standards.
While the OSCE has not yet been officially informed of Mr Milosevic's suggestion, it is aware of the situation and there are hopes within the opposition Zajedno (Together) coalition that OSCE involvement may lead to a settlement in the new year.
The move came after a meeting between Mr Milosevic and the Italian Foreign Minister Mr Lamberto Dini, who described demands for the re-instatement of the election results, in which Zajedno won 15 out of 18 municipalities, as "unrealistic".
Mr Dini has been roundly criticised by one of the Zajedno leaders Mr Vuk Draskovic who heads the Serbian Renewal Movement. Mr Draskovic said he was "offended" by Mr Dini's remarks, including a suggestion that the international community was not seeking the resignation of Mr Milosevic.
Mr Dini, Mr Draskovic said, was showing support for "legal terrorism committed against the electoral will of the Serbian people".
But later yesterday, Mr Draskovic said he was prepared to accept the idea of new elections next year "under democratic conditions".
In yesterday's Zajedno march the controversial effigy of Mr Milosevic in prison garb re-appeared but this time the president had been decapitated with his head lying on the front of a lorry and his body at the back.
