United Nations Security Council members said Monday the political situation in Bosnia-Herzegovina has further deteriorated because of continued divisions in the top leadership in Sarajevo. A report by High Representative Valentin Inzko, the envoy from the European Union, said a "series of obstacles, delays and failures" have prevented progress in settling disputes over political leadership, the constitution and implementing the 1995 Dayton Peace agreement.

"All of these failures - and let me say the word all - are the consequences of political differences and obstructionism," Inzko said.

The Republika Srpska, the Bosnian Serb party in the three-party government in Sarajevo - the others being Croat and Bosnian Muslim parties - has "from time to time created a problem at state level and then criticizing the state for having the problem," he said.

The Republika Srpska, which allies with Serbia, has wanted to secede from Bosnia and has blocked democratic reforms. Bosnian Serbs were blamed for the 1992-1995 Bosnian ethic war, which ended with the Dayton agreement.

Inzko said a quarter of the Bosnian population is unemployed, salaries and pensions are low, poverty is endemic and bank lending has dried up. He said Sarajevo's political stalemate was not helping Bosnia to take necessary steps to join the EU and NATO.

British Ambassador Mark Lyall Grant said Inzko's report was "bleak and honest."

"We have seen another negative European Commission Progress Report," Grant said. "And the political climate has deteriorated further, with a worrying increase in nationalist rhetoric, particularly but not exclusively, from the authorities in the Republic of Srpska. This threatens to seriously impede any further progress."

But Nikola Spiric, the chairman of Sarajevo's council of ministers, disagreed with Inzko's assessment of the situation. Spiric said the report had received contributions from Inzko's local associates who had fallen into "the trap of superficiality and unprofessionalism."

Spiric defended the Bosnian Serb party, saying that it can contribute to political progress.

"The opinionated tone with which the report refers to the Republika Srpska as an obstruction and the Federation of Bosnia- Herzegovina as being in difficulty cannot but disturb any objective observer," Spiric said.