AP 17 Nov 94 22:13 EST V0506 The Associated Press

LONDON (AP) -- The United States is secretly training and assisting Bosnian government forces and has effectively joined the war in Bosnia-Herzegovina, a newspaper said Thursday.

Officials from the Pentagon and CIA denied the report by the European, a weekly newspaper. The European said non-uniformed personnel working for the CIA are assisting the Muslim-led government army with tactical training, satellite intelligence and air traffic control. "They are teaching the Bosnian Muslims how to fight the Bosnian Serbs. We are talking about the Americans taking sides. They have, in fact, joined the war," the newspaper quoted an unidentified European defense source as saying.

On Sunday, the Observer weekly said, "Reports have emerged from U.N. military, French and British sources that former U.S. servicemen have been training Bosnian troops." The Observer said a senior U.N. military source had denied those reports. British Foreign Secretary Douglas Hurd, asked Thursday night by BBC TV about the reports of U.S. assistance to the Bosnian government army, said, "I have assurances that that's not so." He said the assurances were from the U.S. administration.

Dennis Boxx, speaking at the Pentagon briefing Thursday, said Defense Department officials are working with U.S. lawmakers on a broader plan to defy the international arms embargo and assist Bosnian government troops.

Later Thursday, sources in Washington said the United States is considering sending up to $5 billion in military aid to the Bosnian government along with a program of military training. Two sources familiar with a classified briefing to congressional leaders earlier this week said Pentagon and State Department officials presented "heavy" and "light" options for aiding the Bosnian government once the United States decides to openly defy the arms embargo.

The heavy option would involve up to $5 billion in financial assistance, weaponry and supplies, according to a source who attended the meeting in the Capitol Building's secure room used for intelligence briefings. The light option would be far more modest, about $500 million in aid, said the source, speaking on the condition of anonymity.

Earlier Thursday, a defense official told The Associated Press on condition of anonymity that the Pentagon is doing nothing in Bosnia to assist government forces against the Serbs.

A U.S. intelligence official, also speaking on condition he not be identified, also said there was nothing to the European newspaper report. "The CIA is not involved in providing military or intelligence assistance, including training, to the Bosnian government forces," the intelligence official said.

The European said information from U.S. military satellites provides the only comprehensive picture of Bosnian Serb positions. In Washington earlier this week, U.S. Defense Department spokesman Kenneth Bacon declined to answer a question on whether the United States is supplying military intelligence to Bosnian government forces. -END QUOTE-