By David Brunnstrom BRUSSELS, Feb 27 (Reuters) - The states overseeing Bosnia's peace process agreed on Wednesday that the role of the powerful international high representative would be maintained until Bosnia met key conditions. The Office of the High Representative, created in 1995 to oversee implementation of the Dayton Peace Agreement, had been due to close in June 2007, but its mandate was extended a year amid continuing tensions between Bosnia's two parts. Miroslav Lajcak, who holds the dual role of High Representative and EU Special Representative for Bosnia, said the Peace Implementation Council (PIC) had agreed that key conditions would need to be met before the office could close. "The PIC is united in its views," he told a news briefing after a meeting of the multi-national body that includes the United States, Russia and the European Union. Lajcak said that closing the office of the High Representative remained the goal, "but the Bosnia-Herzegovina authorities must ensure that conditions for closure are met." These included a solution to the apportion of state and defence property, fiscal sustainability, and entrenchment of the rule of law though adoption of a war crimes' strategy, laws on asylum, and justice reform. Two other conditions were adoption of a stabilisation accord with the European Union that is a first step to EU membership and a positive assessment from the PIC. "Until then OHR (Office of the High Representative) will remain in place and continue to carry out its mandate," he said. A PIC declaration after two days of talks among members and Bosnian leaders in Brussels, expressed "deep concern" about secession calls by Bosnian Serb leaders and stressed there was no right of secession under the Dayton accords. "WORRYING" DETERIORATION Lajcak said signing of a stabilisation and association deal with the EU was now in reach but it was "worrying" that the positive and constructive atmosphere that led to its initialling in December had deteriorated so rapidly. The European Union said on Tuesday Bosnia could sign the pact in April if it completed police reforms and urged it to avoid missing the opportunity. Lajcak said he was "greatly encouraged" by PIC unity, despite differences between states over Kosovo's independence declaration from Serbia, which Russia strongly opposed. "Of course Kosovo does have an impact in creating an atmosphere throughout the region, but at the same time Bosnia is not a hostage to Kosovo," he said. Bosnian Serb lawmakers threatened last week to hold a referendum on secession from Bosnia if a majority of the United Nations and EU member states recognised Kosovo's independence. And on Tuesday hundreds of protesters tried to attack the United States consulate in Bosnia's Serb Republic, smashing up shops after they were pushed away by riot police Lajcak said he welcomed statements by Bosnian Serbian Prime Minister Milorad Dodik saying that peace and stability would be maintained regardless of regional developments. He said he did not expect fallout from Kosovo warned that if there were any threats to peace and stability he would not hesitate to use his sweeping powers to deal with them. (Editing by Charles Dick)
Serb students march during a demonstration in the ethnically divided town of Mitrovica in Kosovo February 27, 2008. The United States is inciting instability in Europe by backing Kosovo's independence, Russia's ...