The Security Council,

Recalling its earlier relevant resolutions, and in particular its resolutions 779 (1992) of 6 October 1992, 981 (1995) of 31 March 1995, 1025 (1995) of 30 November 1995, 1038 (1996) of 15 January 1996, 1066 (1996) of 15 July 1996, 1093 (1997) of 14 January 1997 and 1119 (1997) of 14 July 1997,

Having considered the report of the Secretary-General of 30 December 1997 (S/1997/1019) and welcoming the positive developments noted therein,

Reaffirming once again its commitment to the independence, sovereignty and territorial integrity of the Republic of Croatia,

Noting again the Joint Declaration signed at Geneva on 30 September 1992 by the Presidents of the Republic of Croatia and the Federal Republic of Yugoslavia, in particular Article 3, which reaffirmed their agreement concerning the demilitarization of the Prevlaka peninsula, and emphasizing the contribution that this demilitarization has made to the decrease of tension in the region,

Noting with concern continued long-standing violations of the demilitarization regime in the United Nations designated zones in the region, but welcoming a decrease in the number of violations,

Welcoming the first substantial progress in implementing the practical options proposed by the United Nations military observers in May 1996, as referred to in the report of the Secretary-General of 31 December 1996 (S/1996/1075),

Noting with concern that there has been no progress towards a settlement of the disputed issue of Prevlaka through mutual negotiations,

Recalling the Agreement on Normalization of Relations between the Republic of Croatia and the Federal Republic of Yugoslavia signed in Belgrade on 23 August 1996, committing the parties to settle peacefully the disputed issue of Prevlaka by negotiations in the spirit of the Charter of the United Nations and good neighbourly relations, and stressing the need for the Republic of Croatia and the Federal Republic of Yugoslavia to agree on a settlement which would peacefully resolve their differences,

Noting that the presence of the United Nations military observers continues to be essential to maintain conditions that are conducive to a negotiated settlement of the disputed issue of Prevlaka,

1. Authorizes the United Nations military observers to continue monitoring the demilitarization of the Prevlaka peninsula, in accordance with resolutions 779 (1992) and 981 (1995) and paragraphs 19 and 20 of the report of the Secretary-General of 13 December 1995 (S/1995/1028*), until 15 July 1998;

2. Welcomes steps undertaken by the parties in adopting the practical options proposed by United Nations military observers to reduce tension and improve safety and security in the area, and calls upon the parties to make further progress in this regard;

3. Reiterates its call upon the parties to cease all violations of the demilitarization regime in the United Nations designated zones, to cooperate fully with the United Nations military observers and to ensure their safety and freedom of movement;

4. Urges the parties to abide by their mutual commitments and to implement fully the Agreement on Normalization of Relations between the Republic of Croatia and the Federal Republic of Yugoslavia of 23 August 1996;

5. Expresses its support for the commitment by the parties to a negotiated resolution of the disputed issue of Prevlaka in accordance with article 4 of the aforementioned Agreement;

6. Urges the parties to take concrete steps towards a negotiated resolution of the disputed issue of Prevlaka in good faith and without delay;

7. Requests the Secretary-General to submit to the Council by 5 July 1998 a report on the situation in the Prevlaka peninsula and in particular on progress made by the Republic of Croatia and the Federal Republic of Yugoslavia towards a settlement which would peacefully resolve their differences;

8. Requests the United Nations military observers and the multinational stabilization force authorized by the Council in resolution 1088 (1996) of 12 December 1996 to cooperate fully with each other;

9. Decides to remain actively seized of the matter.