A moderate politician has been asked to form a new government in the Bosnian Serb Republic.
He is Brano Miljus, an ally of the former Bosnian Serb leader, Biljana Plavsic, who lost September's presidential election.
Earlier, Dragan Kalinic, a supporter of the indicted war criminal, Radovan Karadzic, had failed to form an administration.
Reports say Mr Miljus has pledged to improve Serb compliance with the Dayton peace accord and step up cooperation with the Muslim-Croat Federation in the other half of Bosnia-Hercegovina.
The international community has repeatedly criticised the Bosnian Serbs for failing to support postwar reconstruction and the prosecution of war criminals.
From the newsroom of the BBC World Service