Serbian Prime Minister Zoran Djindjic, who fought to transform his country from pariah nation to pro-Western democracy, was assassinated yesterday and the government swiftly declared a state of emergency.

Djindjic, 50, a key figure in ousting Yugoslav President Slobodan Milosevic and the man who sent him to the UN war crimes tribunal in The Hague, was gunned down outside Belgrade's main government building. He died soon afterwards in hospital.

The government met in urgent session and asked acting Serbian President Natasa Micic to declare the state of emergency under which the army takes over police functions.

The government suggested the killing of Djindjic was linked to organised crime, which flourished in the Balkan region during Milosevic's turbulent rule in the 1990s. Djindjic had pledged to stamp out corruption and gangster activities.

Djindjic, who took office in February 2001 after elections, narrowly escaped injury last month when a truck swerved towards his convoy of cars. He blamed organised crime for the incident.

Western leaders, who have deployed thousands of Nato peacekeeping troops throughout the former Yugoslavia after the Balkan wars of the 1990s, expressed shock at the first assassination of a European government leader since Swedish Prime Minister Olof Palme in 1986.

"Prime Minister Djindjic will be remembered for his role in bringing democracy to Serbia and for his role in bringing Slobodan Milosevic to justice," White House spokesman Ari Fleischer told reporters.

Nato Secretary-General George Robertson said he was "profoundly shocked" by the killing. "This is the desperate action by violent extremists who want to return to Milosevic authoritarianism," he said.

Djindjic sought to rebuild Serbia's image from a nation accused of war mongering and ethnic cleansing into a country accepted once again by the international community.

The killing of Djindjic, who was shot in the chest and stomach, was a clear attempt to transform Serbia "into a kingdom of criminal groups", the government said in a statement.

"The prime minister died from his wounds at 1330 (1230 GMT) at Belgrade emergency centre," Deputy Prime Minister Nebojsa Covic said after an emergency government session.

There was no immediate official confirmation of media reports that two or three people had been arrested.

Flags flew at half-mast, all departing flights from Belgrade airport were suspended and armed police wearing flak jackets searched cars in Belgrade.

Under a state of emergency, border controls are strengthened and public protests or strikes can be banned.

Organised crime thrived when Milosevic was in power. He is now on trial for genocide and crimes against humanity during the wars which tore Yugoslavia apart in the 1990s.

Djindjic is the most senior politician to be killed in a series of murders of public figures in former Yugoslavia in the past three years. Revenge killings are rife in the region.

EU leaders joined in worldwide praise for Djindjic's efforts to bring the Balkan country back into the international fold.

"This crime... was also directed against democracy and stability in the region," German Foreign Minister Joschka Fischer said in Slovenia, part of Yugoslavia until 1991.

President Stjepan Mesic of Croatia, which fought Yugoslav troops in its struggle for independence, described the assassination as "an act of madness".

Djindjic, married with two children, was a pragmatic moderniser dedicated to free-market reforms and came to power in the wake of the Kosovo war in 1999.

His premiership had to contend with the breakaway ambitions of ethnic Albanians in the southern province of Kosovo and negotiate the dissolution of Yugoslavia into a loose union between Serbia and the tiny coastal republic of Montenegro.

He also feuded with Milosevic's successor, the more cautious former Yugoslav president Vojislav Kostunica, behind the scenes over the pace of reform, and the 18-party coalition they co-led split after Kostunica's party left.

News of Djindjic's death shocked supporters who had taken to the streets with him in anti-Milosevic protests.

"Is he really dead? God forbid! Whatever happened to this country. Can we feel safe?," said pensioner Ljiljana, 65.

"Everything is going back to the way it was. We are the same again. The same murders are happening as during Milosevic's time," said Ana, a first year medical student.

Jailed as a dissident student in the 1970s, frustrated as a popular protest leader in the 1990s, Djindjic rebounded in a street uprising in 2000 to become leader-in-waiting of a new democratic Serbia.

A fitness enthusiast, Djindjic was born in Bosanski Samac, in Bosnia, the son of a Yugoslav People's Army officer.

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