EUROPE UPDATE

Czechs, Slovaks Set Deadline

Leaders of Czechoslovakia's two regional parliaments reaffirmed Saturday that negotiations on the political future of the country, which now seems certain to split, must be concluded by Sept. 30.

The date was first agreed by Czech Prime Minister Vaclav Klaus and Slovak leader Vladimir Meciar after their parties won general elections in June in their respective regions. State radio said Czech National Council chairman Milan Uhde and his Slovak counterpart, Ivan Gasparovic, met in Brno and confirmed that a final model for future relations between the two regions must be negotiated by the end of September.

Both Mr. Uhde and Mr. Gasparovic excluded the possibility of holding a referendum, a course advocated by Czechoslovak President Vaclav Havel, to decide the future setup, the radio said.

The process of dividing Czechoslovakia into two separate entities - the Czech and Slovak republics - was taken one step further Friday when President Havel announced that he would resign today. His announcement came as Slovaks, who rejected him as head of state two weeks ago, proclaimed their sovereignty. Panic travels to Sarajevo

New Yugoslav Prime Minister Milan Panic left Belgrade for Sarajevo yesterday to open peace talks with Bosnian President Alija Izetbegovic, Tanjug news agency said. He was delayed for several hours at Belgrade airport waiting for an aircraft provided by United Nations peacekeeping forces.

Journalists in the Bosnian capital said Mr. Alija was ready to talk to Mr. Panic, who took office last Tuesday pledging to restore peace in Bosnia after almost four months of ethnic war that has cost more than 7,500 lives.

Panic made the trip hours before the start of a 14-day cease-fire in the former Yugoslav republic between pro-independence Muslims and Croats and Serb rebels. The warring factions in Sarajevo exchanged fire overnight ahead of the cease-fire due to start late yesterday.

Panic planned to present a tank to UN peacekeepers in Sarajevo as a goodwill gesture and travel later to New York to meet with UN Secretary-General Boutros Boutros-Ghali. Labour elects new leadership

Scotsman John Smith won an overwhelming victory in leadership elections for Britain's Labour Party Saturday and told supporters the campaign for the next election, up to five years away, would start immediately.

Mr. Smith promised to unify a left-wing party shaken in April by its fourth successive election defeat, saying Labour would "relentlessly prosecute" the Conservative government and Prime Minister John Major. He received 91 percent of the vote at a special leadership conference dominated by the trade-union barons who finance the party.

Smith also got the deputy of his choice with former treasury spokeswoman Margaret Beckett. The new team takes over from Welsh firebrand Neil Kinnock and his deputy Roy Hattersley, who quelled left-right squabbles and abandoned hard-line socialism but failed to win power.

Mr. Kinnock resigned days after the April election returned the Conservatives for a fourth five-year term despite the longest recession since World War II. Despite the election defeat, blamed partly on Smith-inspired proposals to raise taxes even on modest incomes to finance welfare and education, Smith said Labour was committed to "democratic socialism."