Croatia's chances of starting entry talks with the European Union have been thrown into doubt by the UN's chief prosecutor, Carla Del Ponte.
Gen Ante Gotovina is accused of war crimes against ethnic Serbs
She has told the EU that Croatia was still not fully co-operating with The Hague war crimes tribunal - a key issue for many in Brussels.
Mrs Del Ponte said Croatian war crimes suspect Gen Ante Gotovina was within the reach of the Croatian authorities.
The EU is to decide whether to start entry talks with Croatia on 17 March.
The EU has said failure to arrest the general could jeopardise entry chances.
A spokesman for the European Commission said negotiations with Croatia could not start on 17 March without a positive assessment from Mrs Del Ponte.
In her letter, Mrs Del Ponte said steps had been taken to freeze the general's assets - but she said these came late, and were marginal.
Gen Gotovina is accused of ordering the killing of more than 100 ethnic Serbs and expelling 150,000 more during an offensive in 1995 to recapture Croatian lands seized by Serb forces.
Luxembourg Foreign Minister Jean Asselborn has said Croatia still had a week to show it was doing its best and the decision by EU foreign ministers on 16 March would be a political one.
"I could imagine that a situation could arise in which Croatia can prove by 16 March that its co-operation is 100% without it perhaps being possible up to that point to transfer Gotovina to the Hague," Asselborn told Deutschlandfunk radio in an interview.
But the BBC's Oana Lungescu, in Brussels, says the chance of Croatia and the EU sitting down for entry talks looks increasingly unlikely.
She says diplomats have confirmed that even Germany, Croatia's strongest supporter, seemed to accept the UK and Scandinavian line that Croatia had to stick to the same strict conditions as other countries in the Balkans if it wanted closer ties with the EU.
There is no last-minute offensive to keep to this timetable, one diplomat said - the question is what should be done after 17 March.
EU ambassadors will meet on Thursday to decide whether to give Croatia a new deadline to locate Gen Gotovina or simply to promise to start membership talks as soon as there is full co-operation with the tribunal.
But our correspondent says that at a time of increased uncertainty in the Balkans, the EU is desperately keen to send a positive signal to the region.
If Zagreb can prove it is really serious about finding the general, some believe it could still start negotiations by the end of June, she says.