She suggested that the region's many ethnic groups should be segregated into their own, separate states.

She gave no indication in her speech, however, of how this might be achieved.

Mrs Markovic was speaking as world leaders met in Sarajevo to discuss Balkan reconstruction.

Describing the Balkans as one of the most "multi-ethnic" parts of the world, she said a community of regional states would allow the different peoples to coexist in peace, the Yugoslav state news agency Tanjug reported.

Conflicts and minorities

It quoted her as telling a Mexican TV station that there was no need to overcome the issue of nationality.

"A great many tensions, conflicts and wars pertained to minorities and their position," said Mrs Markovic, who heads the Yugoslav Left party.

"That is why I believe the only solution for the Balkan peninsula is to set up a community of Balkan nations comprising those who live in the territory of the Balkans."

Separate states for Serbs and Albanians

She said she believed this was the only way "to end tensions that exist between Balkan peoples, [and] to release their energy for modern economic and cultural development".

"That is also the only way for all Serbs to live in one state and all Albanians in one state, and all Bulgarians in one state, and all Macedonians in one state, and so on."

"I am certain that not only the fate of peace in the Balkans but even the fate of peace in Europe largely depends on this idea," she said.