With all eyes on Iraq and a potential war, the world appears to be neglecting a region that remains a potentially explosive hotspot.

Three years after the Kosovo conflict, the Balkans are rife with ethnic tensions amid a flourishing criminal landscape. That's according to a recent report released by the Council on Foreign Relations, a Washington-based think-tank.

A dangerous mixture of social tensions, political corruption and ethnic and religious divides could turn Bosnia, Serbia, Kosovo and Macedonia into destabilizing factors for southern Europe as a whole.

More Aid

To counter this development the report concludes that more aid to the Balkans is required from Europe and the United States. Without more rapid reconstruction efforts, the report's authors stress, the region could quickly become a haven for drug traffickers, people smugglers and militant Islamic networks. Poverty levels will also rise encouraging further migration.

"Neglecting these challenges will have severe and destabilizing consequences for southeast Europe," the report says. "It would be an especially serious blow to Europe raising the specter of increased refugee flows."

There is widespread concern that the United States and its allies are too busy focusing on a possible war with Iraq and not devoting enough attention to stabilizing the Balkans.

While the council recommends that Europe take the lead in rebuilding the Balkans and encouraging swift assimilation, lasting success in the region is largely dependent on U.S financial aid and military presence.

Germany is committed

Germany, meanwhile, has stressed that it remains committed to its contribution effort on the Balkans. Last week, parliament renewed the German forces' mandate for Macedonia, while Defense Minister Peter Struck on a recent visit to Kosovo pledged more civilian structures to the aid effort "until all the ethnic groups can live together again." He said Germany's military presence would remain in the region for years. "This is not a short-lived mandate," he said."

Still, Jörg Knoechelmann a German army spokesman, told DW-WORLD that a a "step-by-step reduction" of the troops belonging to the Stabilization Force in Bosnia and Herzegovina (SFOR) was going ahead. The German SFOR contingent, he said, currently numbers 1,700, although he gave no details on the reduction.

While declining to comment explicitly on the Council on Foreign Relations report, he pointed out that the United States had a certain level of commitment to the Balkans through NATO which it would honor.

New EU initiative

However, the impression remains that the Council has singled out the United States for criticism in its Balkan effort particularly as the report comes just weeks before a new European Union initiative gets under way in Bosnia. The first of its kind under the EU's new security and defense policy, the EU's police mission (EUPM) will be made up of policemen and women from a number of bloc members with the aim of advising, monitoring and tutoring local police.

The German contingent of the 518-strong force will be the largest, numbering 85 police officials. An EU Council official said the German participation was indicative of the German involvement as a whole in the Balkans.

"The Germans have around 4,000 troops stationed throughout the Balkans which shows their level of commitment to the region," said the official, who didn't want to be named.

Bigger EU role

The Council says the European role in the Balkans will grow over the coming years. A number of long-term missions for the region along the lines of the EUPM are in the pipeline. "There is no exit strategy," the official said.

There are already more European than U.S soldiers based in the region and although the U.S. forces are not yet operating under an EU flag, this could become a distinct possibility sooner rather than later, according to the Council official.

Referring to the report by the Council on Foreign Relations, the official said it appeared to be an implicit criticism of the U.S role in the Balkans and the fears that Washington could reevaluate its priorities in the region.

Still, the EU Council is convinced that the U.S will stand by its maxim issued by one of its military leaders following the Dayton agreement: "In together, out together."