U.S. denies Belgrade spy claim

Perisic was arrested along with a U.S. diplomat he had met

BELGRADE, Yugoslavia -- The U.S. Embassy has denied allegations that one of its diplomats received classified documents from a senior Yugoslav minister.

Serbia's Deputy Prime Minister Momcilo Perisic was arrested last week and questioned on suspicion of spying for the U.S.

He was detained in a Belgrade restaurant along with the American diplomat John David Neighbor.

Both men have since been released.

On Sunday, U.S. Embassy spokesman Paul Denis told the Associated Press: "We were unhappy with the arrest of our diplomat ... and with the claim that documents were passed, since this is untrue."

Neighbor was held for 15 hours, at one point reportedly with a hood over his head.

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Yugoslav Foreign Minister Goran Svilanovic has apologised to the U.S. Embassy.

Denis added: "The Embassy has received a very sincere apology by the minister of foreign affairs.

"His apology and the promise of no further action against our diplomats, as far as we are concerned, ends this as a bilateral issue."

The Yugoslav Army said Saturday it first noticed that one of its officers, identified as Lt. Col. Miodrag Sekulic, was "passing confidential documents" to Perisic, who in turn "handed them over to a foreign citizen."

Military prosecutors are expected to decide next week on possible formal charges against Perisic and Sekulic.

Prime Minister Zoran Djindjic described the arrests as "a first-rate scandal with international consequences."

The arrests have exacerbated tension between Djindjic's reformist government and moderate nationalist Yugoslav President Vojislav Kostunica.

Perisic is a former army chief of staff under Slobodan Milosevic but was sacked in November, 1998, when Milosevic fired him after he criticised the then president's policies in Kosovo.

In 1999, he said he had warned Milosevic he should avoid a war with NATO that the army could not win. Milosevic disagreed and fired him shortly before NATO launched its air war.

Perisic later founded his own party, the Movement for Democratic Serbia, joined the coalition that toppled Milosevic in 2000 and in January 2001 became a deputy prime minister in the Serbian government.

Croatia has indicted Perisic for war crimes and tried him in absentia for shelling the Adriatic city of Zadar, where he was a Yugoslav army commander in 1991 at the start of the Croatian war.

He was found guilty and sentenced to 20 years in prison in 1996. Croatia wants him removed from office.

The U.N. war crimes court in The Hague has not published any charges against Perisic.