Former Nato commander Wesley Clark has said the former Yugoslav leader Slobodan Milosevic knew a massacre in Srebrenica was being planned.
Wesley Clark spent more than 100 hours in talks with Mr Milosevic
The United Nations war crimes tribunal in The Hague heard that Mr Milosevic had told him he warned Bosnian Serb General Ratko Mladic not to do it.
A transcript of Mr Clark's closed-door evidence was published on Thursday.
Mr Milosevic, facing 66 counts of war crimes, crimes against humanity and genocide, said Mr Clark was lying.
Now a US presidential candidate, the retired general directed Nato's bombing campaign against Serbia in 1999.
Mr Clark was a member of the US team that helped negotiate the 1995 peace agreement ending the Bosnian war.
More than 7,000 Bosnian Muslim men and boys were killed by Bosnian Serb troops in Srebrenica in 1995 before the peace deal.
Prosecution spokeswoman Florence Hartmann said Mr Clark's testimony was "extremely important" as it was the most direct evidence so far of Mr Milosevic's advance knowledge in the massacre.
Mr Clark spent more than 100 hours of meetings over four years with Mr Milosevic during the Balkan wars.
He said he had asked Mr Milosevic whether the delegation should be dealing with him with regards to the Bosnian Serbs.
"President Milosevic said 'With me, of course'," said Mr Clark.
He said that during a break in negotiations he asked Mr Milosevic about the Srebrenica massacre a month before.
"I was still wrestling with the idea as to how it is that Milosevic could maintain that he had the authority and the power to deliver the Serb compliance with the agreement," he said.
"I said 'Mr President, you say you have so much influence over the Bosnian Serbs, but
how is it then, if you have such influence, that you allowed General Mladic to kill all those people in Srebrenica?'
"And Milosevic looked at me and he paused for a moment. He then said 'Well, General Clark... I warned Mladic not to do this, but he didn't listen to me.'"
Mr Clark told the tribunal he understood the remark to mean Mr Milosevic had advance knowledge that the massacre would take place.
"It was the kind of reply that I came to expect from the accused," he said. "He indicated foreknowledge, and then he attempted to disassociate himself from the responsibility for it."
More than 7,000 people were killed in the Srebrenica massacre
Mr Milosevic, during cross examination of Mr Clark, denied the conversation ever happened.
"General Clark, this is a blatant lie," he said. "First and foremost because we did not talk about Srebrenica at all, and secondly because... I never issued a single order to General Mladic or was I in a position to issue him an order."
The transcript, published on the tribunal website, was reviewed by State Department lawyers prior to publication to protect US national interests. But the tribunal said none of it was edited.