Nato troops led by the SAS encircled a church and a priest’s family home in the former Bosnian Serb stronghold of Pale, a few miles from Sarajevo, amid gunfire and an explosion, The priest and his son were wounded when explosives were used, the first time that civilians have been seriously injured in a raid to arrest the former Bosnian Serb leader.

Witnesses to the operation in the early hours of yesterday said that unmarked Nato vehicles, including an ice-cream van, approached the priest’s house before the building was stormed. At least three Nato helicopters hovered over the town.

Mr Karadzic, who has been charged with genocide by the International Criminal Tribunal for the former Yugoslavia in The Hague for his part in the Bosnian war, has been on the run for eight years in an area policed by thousands of Nato troops.

About 2,000 Bosnian Serbs, including their Prime Minister and President, gathered in Pale to protest against the operation.

Sources say that the raid was launched after Nato received “hard evidence” that Mr Karadzic was in the area.

The priest, Jeremija Starovlah, and his son, Aleksandar, were taken by helicopter to a civilian hospital. They were both in intensive care where their condition was decribed as serious.

Vitorka Starovlah said that the troops “pointed a gun at me and prevented me from approaching my husband and son. It was horrible, like in the worst horror movie.”

Nato troops raided the same church in January in another failed attempt to arrest Mr Karadzic. They had then been told that he was in the town seeking medical attention.

The deployment of the SAS during this latest operation shows a renewed vigour on the part of the international community to try to arrest the man at the top of the UN tribunal’s most-wanted list.

The indictment against Mr Karadzic and Ratko Mladic, his wartime general and a fellow fugitive, accuses them of being “criminally responsible for the unlawful confinement, murder, rape, sexual assault, torture, beating, robbery and inhumane treatment of civilians”.

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