The assembly session, originally scheduled for midday local time, was postponed for three hours to allow parliament's constitutional committee to discuss the legal implications of martial law.
The measure was agreed upon by the Bosnian Serb army supreme command and political leader Radovan Karadzic on Friday but it was left to the self-styled national assembly to endorse it.
By imposing martial law across the 70 percent of Bosnia the Serbs control, the 83-member parliament would effectively vote itself out of existence and relinquish all power to Karadzic and the army.
Bosnian Serb sources said many deputies, anxious to preserve their current status, according to which they are not accountable to military authorities, would fight "tooth and nail" to avoid the measure.
The sources said the influential speaker of the parliament, Momcilo Krajisnik, had been instrumental in buying time and forcing the decision to be left to the parliament rather than be adopted on the spot last Friday.
"This is an insider fight almost as tough as any on the battlefield," said one source, who insisted on anonymity.
The army wants martial law to tighten discipline, together with the general mobilization announced last week. The measures would help counter a series of Moslem offensives which have severely stretched limited Serb manpower.
Bosnian Serb sources said that only after introducing martial law in a limited zone of operations in northwest Bosnia was the Bosnian Serb army chief of staff, General Manojlo Milovanovic, able to reverse Moslem gains there.
Moslem forces staged a surprise breakout from the Bihac enclave two weeks ago and captured large amounts of territory as well as making gains in the west with the capture of Kupres. The Serbs have since rallied and rolled back some of the Moslems' gains.
The Serbs said they recaptured the village of Grabez east of the town of Bihac "in an unstoppable counter-attack.'' Milovanovic, the commander of the operation, called it a "brilliant victory''. Major Herve Gourmelon, a UN spokesman in Sarajevo, confirmed that Serb troops had advanced about four kilometers west from Bosanska Krupa toward the strategic Grabez high ground.
A separate report carried by SRNA, the Bosnian Serb news agency, said Serb troops took control of an "important Moslem stronghold'' around the Ripac Gorge, about nine kilometers southeast of Bihac. There was no confirmation of this claim.
The Serbs need to strike back to boost their morale. Though they still hold around 70 percent of Bosnia, their battlefield reputation has been tarnished by their recent losses.
On Tuesday, sniping and shrapnel killed five people and wounded seven as increasing violence on battlefields around the country spread to Sarajevo. And UN peacekeepers were the targets of nine attacks throughout the republic. It was unclear who was responsible in most cases, but British peacekeepers blamed the Serbs for one attack near the eastern Moslem enclave of Gorazde that slightly wounded two British soldiers.
The dead in Sarajevo included three children, hospital officials said. Five children were wounded in the fighting, the heaviest in central Sarajevo in nearly six weeks.
Lieutenant General Sir Michael Rose, who heads the UN peacekeeping effort in Bosnia, summoned military chiefs of the warring sides to Sarajevo airport Wednesday to try to prevent hostilities from increasing.
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