Sarajevo, under siege for close to two years, has been largely quiet since NATO set Serb forces a Feb. 21 deadline to withdraw their heavy weapons or risk having them bombed.
There were conflicting reports on whether the hardware used in Thursday's clash fell within NATO's definition of "heavy weapons" -- artillery pieces, tanks, rocket launchers, mortars and anti-aircraft guns.
UN officers in Sarajevo said the fighting involved rocket-propelled grenades and machine guns. Witnesses said it was triggered by the explosion of a mortar bomb near the city center.
A NATO spokesman said the alliance had no confirmation banned weapons had been used.
In a separate action, UN officers reported French peacekeepers fired warning shots at Serb positions after Serb troops opened small-arms and machine-gun fire on Bosnian army trenches in southeast Sarajevo.
In Brussels, NATO officials said the UN commander in Bosnia, Lieutenant General Sir Michael Rose, had told the alliance he did not want air strikes in response to an isolated incident.
Air raids on Serb positions would expose UN peacekeepers in Bosnia to the threat of retaliation.
A British peacekeeper told reporters on Thursday the Serbs had set up special units to attack UN forces guarding heavy weapons around Sarajevo if NATO aircraft attacked.
"I have been told (by the Serbs) that there are special units in the area -- they wouldn't say where, who, what -- that are specifically here in case of air strikes, who would turn up, no questions, no nothing, and just shoot," said Flying Officer Julian Woodhouse.
Speaking at a site for surrendered Serb weapons at Osijek, west of Sarajevo, he added: "They've made it very plain to us that ... they would have no qualms, if air strikes had come in, in ensuring we never left this place alive."
Britain and France account for the bulk of UN peacekeeping troops in Bosnia, with 2,500 and 6,000 respectively.
In other action in Bosnia, Sarajevo radio reported that the besieged Moslem enclave of Maglaj in eastern Bosnia had been under heavy artillery fire. One person was killed and four were wounded in what it described as one of the town's worst days.
Maglaj has been cut off from overland relief from the United Nations since the war in Bosnia began nearly two years ago, with just one convoy reaching it last October.
In western Bosnia, the Moslem town of Bihac came under artillery bombardment, according to Sarajevo radio which said 11 people had been killed while standing in a queue for humanitarian aid. There was no independent confirmation.
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