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In a late-night emergency session, the UN Security Council voted to back the stand taken by the UN's commander in Bosnia, General Philippe Morillon, and offer its protection to the besieged city.
Under the proposal, Srebrenica would become a centre for Bosnian Muslim refugees seeking safety from Bosnian Serb aggression. However, the details of how such a safe haven would be defended are unclear.
Tens of thousands of civilians trapped in the town are said to be in a state of panic tonight as Serbian forces close in on what may be a final offensive to take the town.
Srebrenica has been under siege for 11 months, and UN officials say it is unlikely to hold out for much longer.
"The Muslim forces have few weapons and even less ammunition," warned a UN military source.
Bosnian radio said the Serbs had moved to within a mile (1.6km) of the town itself.
Conditions in Srebrenica are said to be appalling. The town's normal population has been swollen by thousands of refugees, fleeing the advancing Serb forces.
Hundreds are wounded, and many are dying for lack of medical facilities.
The Bosnian government has urged the world to act swiftly.
"We appeal to you on behalf of the people of Srebrenica who are threatened with extinction," it said in a statement. "Thousands of women, children and elderly are going to be massacred."
The leader of the Bosnian Serbs, Radovan Karadzic, warned the town's defenders that if they did not give up their weapons the Serbs would advance.
"We are not going to enter Srebrenica, we just want to pacify Srebrenica," he said.
Last month General Morillon declared Srebrenica under UN protection, pledging to stay in the town himself as a gesture of solidarity.
The UN's efforts to evacuate the wounded have caused chaotic scenes in which several have died, crushed to death in the scramble to get on board the convoys of trucks.
The last group of 800 refugees left on UN trucks just three days ago.
Srebrenica is one of the last Muslim strongholds in eastern Bosnia, an area where all the main towns had a Muslim majority before the war.
The designation of Srebrenica as a safe area was extended on 6 May to include five other Bosnian towns: Sarajevo, Tuzla, Zepa, Gorazde and Bihac.
The Bosnian President, Alija Izetbegovic, dismissed the concept. He said the havens would become death traps, where refugees, thinking they were safe, would instead become easy targets for Bosnian Serb forces.
The safe havens of Sarajevo and Gorazde were attacked in 1994, prompting UN airstrikes. Then, in 1995, Srebrenica was finally overrun by the Bosnian Serb forces of General Ratko Mladic.
The tiny contingency of Dutch UN peacekeepers assigned to defend the town were powerless to stop them, and about 30 UN soldiers were taken hostage by Serb forces.
A belated Nato airstrike on Bosnian Serb positions following repeated requests from the Dutch commander also failed to prevent the carnage that was to follow.
An estimated 7,000 Muslim men and boys were murdered and buried in mass graves in the worst atrocity in Europe since World War II.
General Mladic was later indicted by the War Crimes Tribunal for genocide, but is still at large.
In 2002 the entire Dutch government resigned after an inquiry blamed officials for giving their poorly-armed UN peacekeepers an impossible task in asking them to defend the town.
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