Prosecutors at the UN war crimes tribunal at The Hague have asked the court to hand over three Serb suspects to either Croatia or Serbia for trial.
The killings happened after the fall of the Croatian town of Vukovar
Veselin Sljivancanin, Miroslav Radic and Mile Mrksic are charged with complicity in the killing of more than 200 Croat civilians in Vukovar in 1991.
The former army officers, known as the "Vukovar Three", all deny the charges.
The UN has not recommended to which country the trial, which could fuel tensions in the region, should be sent.
According to The Hague tribunal's indictment, originally issued in 1995, the three accused oversaw the removal of some 300 men who had taken refuge in the Croatian town's hospital to Ovcara pig farm, 4km outside the town.
Approximately 260 of the detainees, some of whom were beaten to death, were executed and then buried in a mass grave, the indictment says.
Miroslav Radic is accused of playing a role in the Vukovar killings
Chief UN war crimes prosecutor Carla del Ponte said the arguments for the trial to be transferred to either Serbia or Croatia were "evenly balanced".
She said cases should be tried in the state where the crimes took place, if possible, and said Croatian officials had promised the suspects would get a fair trial there.
But she also praised the special war crimes tribunal set up in the Serbian capital Belgrade in 2003, which is trying 17 other Serbs accused of involvement in the Vukovar killings.
Judges at The Hague may take several months to decide where the case should go.
Bruno Vekaric, spokesman for Serbia's war crimes prosecutors, told the Associated Press news agency that sending the former Yugoslav army officers to Croatia "would be very, very damaging" for relations with The Hague tribunal.
But Andjelko Milardovic, of the Centre for Political Research in Zagreb, Croatia's capital, told Reuters news agency that Croats would not be happy with a trial held in Serbia.