Bosnian Serb Troops Stand Defiant on Mountains above Capital, Soldiers Say They Won't Withdraw, Are Ready for Strikes. REPORT FROM THE SERB FRONT LINE

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LIKE a miniature model lying at his feet, the shell-battered buildings and streets of Sarajevo sprawl beneath Zoran Divcic's mountainside bunker.

With bone-chilling clarity, one can see through a gauzy haze of snow and mist the burned-out hulks of skyscrapers, needle-like minarets and steeples, the old Turkish marketplace, and the homes and apartments of the 380,000 residents who have been trapped in the city for nearly two years.

And, directly below, the stick-like figures of French United Nations soldiers bustle about their base in the Skenderija shopping mall, an easy 500-yard shot from Mr. Divcic's post on the Bosnian Serb siege lines.

If NATO warplanes attempt to break those lines, warns the former postal worker, the UN Protection Force (UNPROFOR) base will be his first target.

"UNPROFOR will become our enemy. This would be war," vows Divcic, his resolute eyes framed by a grimy beard. "We would start a great fight. We will hit every enemy plane. None will return to base. That is guaranteed.

"We hold the city in our palm," he adds, as comrades nod in agreement. "They know we can destroy the whole city in 24 hours. But we don't want to."

Such warnings have fueled the hesitancy among Western governments to take military action. But last Saturday's mortar blast that killed 68 people and wounded nearly 200 others galvanized public opinion and diplomatic action.

NATO overcame internal divisions on Wednesday and gave the Bosnian Serbs 10 days to either move their tanks, cannon, and other heavy weapons 13 miles from central Sarajevo or place them under UN control. The Bosnian government must also place its artillery under UN control.

If they do not, they will be attacked by the dozens of United States, British, and Dutch jets based in Italy and on carriers in the Adriatic Sea that have been practicing daily over Sarajevo for months.

No matter what may be the outcome of Geneva peace talks, which began again yesterday, Bosnian Serb officers on the ground say they will never pull all the big guns back. To do so, they argue, would open their territories to assault by more numerous Bosnian troops seeking to avenge the destruction of their city.

In Geneva, Bosnian Serb leader Radovan Karadzic, furious at the threat of NATO airstrikes, said yesterday the new round of peace talks were deadlocked because Muslims had rejected a Serb proposal to set up an international inquiry into last weekend's Sarajevo market massacre.

"We cannot agree to removing our artillery without being able to protect our front lines," says Col. Komljen Zarkovic, a senior official of the Bosnian Serbs' self-styled defense ministry.

Indeed, he admits, "We have already pulled some of our artillery back and hidden it in the forests. I think we will intensify our preparations."

He repeats the apocalyptic forecast of a wider war that Bosnian Serb leaders warn would erupt as a consequence of airstrikes. "The Serbs will ... quickly get support from our friends. Europe is getting involved without any reason in a civil war that could quickly escalate into the center of Europe."

The Bosnian Serb and rump Yugoslav media seem to be readying their publics for a showdown with the West. News programs show confidence-boosting scenes of smiling soldiers hefting Strela antiaircraft missiles, the Yugoslav-built version of the Soviet-made shoulder-fired SAM-7, or manning antiaircraft cannon. …