Richard Holbrooke negotiated the deal that ended the Bosnian war
The claim by Radovan Karadzic that he made an immunity deal with the US has been dismissed as "laughable" by the US diplomat concerned.
Richard Holbrooke, who negotiated the accord that ended the Bosnian war, told the BBC: "There was never any deal."
Mr Karadzic, the Bosnian Serb leader during the war, made the claim as he appeared in the dock at a war crimes tribunal in The Hague on Thursday.
He has been charged with 11 counts of war crimes, including genocide.
He said he had decided to represent himself during his trial, but did not immediately enter a plea.
He was given 30 days to do so - the tribunal judge adjourned the hearing until 29 August.
Mr Karadzic referred to an alleged deal made with Mr Holbrooke, the former US ambassador to the United Nations, for him to withdraw from public life.
Mr Karadzic said he had wanted to appear before the tribunal when first indicted in 1996 - but was in fear of being "liquidated" if he did so, under the terms of the "deal".
Eleven counts of genocide, war crimes, crimes against humanity and other atrocities
Charged over shelling Sarajevo during the city's siege, in which some 12,000 civilians died
Allegedly organised the massacre of up to 8,000 Bosniak men and youths in Srebrenica
Targeted Bosniak and Croat political leaders, intellectuals and professionals
Unlawfully deported and transferred civilians because of national or religious identity
Destroyed homes, businesses and sacred sites
Mr Karadzic said his arrest was in violation of this deal. He also alleged that he had been seized and held by "unknown civilians" three days before the official arrest date given to the court.
But Mr Holbrooke told the BBC the claim of a deal was a "completely false story, put out by Karadzic after he disappeared from public life, and he was trying to justify himself".
"It's laughable. This is the first time I've actually heard it and it's quite hilarious the desperation in his voice," the former US diplomat added.
"There was never any deal to give him immunity from capture, it was simply that Nato failed to capture him. That's Nato's failure, not a deal."
Claims that such a deal existed have been put forwarded by Mr Karadzic's supporters for some years.
Mr Karadzic had remained president of the Bosnian Serb Republic (Republika Srpska) until 1996, despite having been indicted for war crimes the year before.
But his continued refusal to resign was overshadowing Bosnia's first post-war elections, which were approaching.
In July 1996, Mr Holbrooke announced in Belgrade that Mr Karadzic had been persuaded to step down.
"He will not appear in public, or on radio or television or other media or participate in any way in the elections," Mr Holbrooke said.
Shortly afterwards, Mr Karadzic went into hiding, not to reappear until his capture last month.
But Mr Holbrooke denies that immunity was ever part of the 1996 agreement.
Radovan Karadzic says he will defend himself
Correspondents say Mr Karadzic's sensational claims and his decision to conduct his own defence means this first court appearance is likely to be just the opening skirmish in a long legal battle.
Some relatives of the victims of the Bosnian war watched Thursday's hearing on television.
Kada Hotic, whose son was killed when Serb troops overran Srebrenica said justice had been reduced to "theatre".
"He stole the ground from under our feet and he took the sky from above our heads, he killed our sons," she told the AFP news agency.
"And what we get in return is a theatre performance. The world is looking at this as if it were a spectacle."