Senior Croatian and Bosnian Serb politicians on Thursday announced a new policy that would let tens of thousands of people who fled regional wars here go home. The announcement came after the officials met with US Secretary of State Madeleine Albright, who traveled to the Serb heartland of Bosnia on a mission to help former foes reconcile.

Albright, Bosnian Serb premier Milorad Dodik and Croatian foreign minister Tonino Picula unveiled a declaration that would enable all refugees to return to their homes. It is to be submitted to both Balkan governments for approval within three months. As a sign of good will, both sides said they will let 4,000 Bosnian Croat and Croatian Serb refugees return home within the next three months.

Both ethnic groups fled wars in the region over the past decade. About 30,000 Croatian Serbs are in the Serb part of Bosnia and 70,000 Bosnian Croats are in Croatia, according to UN figures. Ethnic hatreds and bureaucratic obstacles have delayed any substantial returns, particularly under previous Bosnian Serb and Croatian governments which opposed ethnic reconciliation.

Most of the details of how the current governments will encourage returns were not immediately available, though Croatia will open a consulate in Banja Luka and appoint a consul to ease the process. Albright said she `welcomes enthusiastically' the agreement. She said the United States will provide $2 million for the reconstruction of 100 homes on each side of the border. `We are taking another step away from past madness', she said.