BATROVCI, Yugoslavia - The line of cars at this Serbian border town forms early in the morning as travelers head west from the Yugoslav capital of Belgrade toward Croatia and Bosnia. The Yugoslav security officers are thorough, checking each passenger and rummaging through the trunk of every vehicle. Many of the travelers are Moslems, and the adults wait quietly at the terminal as their children play tag between lines. A few years ago, these people would have been virtually indistinguishable from the thousands of others who crisscross the region. But today Islamic pride has arrived. Many Moslems have grown beards. Drivers have placed large decals with the Islamic crescent on the back window. And with money coming from such countries as Iran and Saudi Arabia, being a Moslem means having options. Diplomats in the region say Bosnia was the first bastion of Islamic power. The autonomous Yugoslav region of Kosovo promises to be the second. During the current rebellion against the Yugoslav army, the ethnic Albanians in the province, most of whom are Moslem, have been provided with financial and military support from Islamic countries. They are being bolstered by hundreds of Iranian fighters, or Mujahadeen, who infiltrate from nearby Albania and call themselves the Kosovo Liberation Army. US defense officials say the support includes that of Osama Bin Laden, the Saudi terrorist accused of masterminding the bombings of the US embassies in Nairobi and Dar es Salaam. A Defense Department statement on August 20 said Bin Laden's Al Qa'ida organization supports Moslem fighters in both Bosnia and Kosovo. The growing Islamic fundamentalist presence is an issue rarely voiced in public. The Arab and Islamic world form a huge part of the current and potential market for many of the countries in Central Europe, and highlighting their involvement in the violence in Kosovo is simply bad business. But the growing support of Iran in Central Europe and the Balkans is regarded as the biggest threat to the region, with the possibility that it can spill over into Western Europe. "If we isolate the Moslems in Bosnia, then they themselves can be a threat neither to the Federal Republic of Yugoslavia nor to the wider region," Yugoslav Defense Minister Pavle Bulatovic said in an interview. "They could be a threat if they gain support from other Moslem national movements or Moslem states." Yugoslav officials and, privately, many foreign diplomats link the Iranian-backed Bosnian regime to the current rebellion in Kosovo. They say the Iranian success in maintaining a presence and influence in Sarajevo led Teheran to quickly adopt the KLA. The KLA strength was not the southern Kosovo region, which over the centuries turned from a majority of Serbs to ethnic Albanians. The KLA, however, was strong in neighboring Albania, which today has virtually no central government. The crisis in Albania led Iran to quickly move in to fill the vacuum. Iranian Revolutionary Guards began to train KLA members. Iranian and Saudi representatives opened foundations to provide patronage. An Islamic bank was launched in the Albanian capital of Tirana. In Skadar, Iranian agents opened the Society of Ayatollah Khomeini. In the Kosovo town of Prizren, Islamic fundamentalists formed a society funded by the Iranian Culture Center in Belgrade. Selected groups of Albanians were sent to Iran to study that country's version of militant Islam. So far, Yugoslav officials and Western diplomats agree that millions of dollars have been funnelled through Bosnia and Albania to buy arms for the KLA. The money is raised from both Islamic governments and from Islamic communities in Western Europe, particularly Germany. Since April, Yugoslav officials say, the KLA has smuggled arms and ammunition in from Albania. They say attempts to smuggle several cannon - meant to launch large- scale strikes against Yugoslav forces - were unsuccessful. The ramifications of the Iranian campaign has been felt throughout the Middle East. Both Israel and Turkey, for example, have been alarmed by its success in gaining influence in both Bosnia and Albania and have been busy trading intelligence on developments in the region. "Iran has been active in helping out the Kosovo rebels," Ephraim Kam, deputy director of Tel Aviv University's Jaffee Center for Strategic Studies, said. "Iran sees Kosovo and Albania as containing Moslem communities that require help and Teheran is willing to do it." But much of the training of the KLA remains based in Bosnia. Intelligence sources say mercenaries and volunteers for the separatist movement have been recruited and paid handsome salaries of DM 3,000-DM 5,000 (NIS 6,800-NIS 11,400) a month. The trainers and fighters in the KLA include many of the Iranians who fought in Bosnia in the early 1990s. Intelligence sources place their number at 7,000, many of whom have married Bosnian women. There are also Afghans, Algerians, Chechens, and Egyptians. A US congressional analyst said much of the Iranian training and arms smuggling in Bosnia takes place near the contingent of US peacekeeping troops. He said the Clinton administration is fully aware of Iranian activities in Bosnia and Kosovo, but has looked the other way to maintain the 1995 Dayton Accords. "The administration wants to keep the lid on the pot at all costs," the analyst said. "And if that means that Iran benefits and operates freely in the region, so be it. Needless to say, the Europeans have been quite upset by this." Still, intelligence sources said, the Iranians have acted cautiously. They say they first arrived in Kosovo early this year and formed a commando unit in May in the town of Donji Perkez. The unit consisted of 120 men divided into seven groups. They included Albanian, Bosnian, Macedonian, and Saudi nationals. The commander was an Egyptian called Abu Ismail, who served in an Iranian Mujahadeen unit in Zenica, Bosnia. The Iranian fighters were first kept separate from others in the KLA. In late July, the fighters from Macedonia and Saudi Arabia were ordered to withdraw into Albania. The reason was that the sponsors concluded that they were not being used properly. At the Yugoslav and Macedonian border, some of the fighters were captured and interrogated by authorities. Yugoslav officials and regional diplomats expect to see the Bosnians continue to embrace the Iranians. They see Bosnia, as well as some officials in Croatia, as intending to change the terms of the US-sponsored Dayton Accords that establish the new borders of the former Yugoslavia and maintain an international presence in the region. The changes being demanded by some key figures in Bosnia include transforming the federation from a multiethnic into an all-Islamic country. "It was clear to everybody that the implementation of the Dayton and Paris accords would not go smoothly," Bulatovic, the Yugoslav defense minister, said. "Our position is that the Dayton Accords must be implemented as written. If there are renegotiations, it would jeopardize peace and stability in Bosnia." Yugoslav officials said their crackdown in Kosovo has been successful in stabilizing the province. They said the KLA has drastically reduced its activities and most of its members have fled to Albania. UN officials said 14,000 residents of Kosovo have crossed into northern Albania, while another 20,000 people driven out of their homes remain in the Serbian province. The result, the officials said, is that some leaders of the ethnic Albanian community have signalled that they are ready to negotiate an end to the fighting. Kosovo leader Ibrahim Rugova, who last year pledged to reject any solution short of independence, has begun to talk to Yugoslav President Slobodan Milosevic. At the same time, KLA political representative Adem Demaqi has warned that a guerrilla war would soon be launched. The officials expect that US pressure will lead to an agreement to hold elections in Kosovo, establish an autonomous government, and approve a plan to reconsider the issue of independence in another 3-5 years. They expect the agreement to be accompanied by a lifting of all sanctions against Yugoslavia, which from 1992 has been unable to take a seat in the UN or receive credits from international institutions, such as the World Bank. At the same time, NATO will play a large role in the area. Members of the alliance are drafting plans to rebuild Albania's 5,000-member military and maintain a large presence in the country. But the country is regarded as so divided and corrupt that few officials expect any significant amount of money to be given Tirana. A key step is expected to be the parliamentary referendum scheduled in November to approve the country's first post-communist constitution. Few in the region, however, expect the prospective diplomatic settlement to do better than the Dayton agreement in imposing long-term stability in the region. Even while some of these diplomats and officials blast Belgrade's crackdown on the Kosovo separatists, they insist that any settlement not include changes in Yugoslavia's current borders or a mere short-term presence of international troops. "In my view, international support will be long term because the economic, regional, and religious (problems) are so high," Slovenian military chief of staff Brig.-Gen. Iztok Podbregar said. "This is not only the case in Bosnia, but also in Kosovo and Macedonia."