Bosnia and Georgia pose threat to EU security, US intelligence chief says

"Events in the Balkans will again pose the principal challenges to stability in Europe in 2010," he said, singling out separatist tendencies in ethnic Serb enclaves in Bosnia and Kosovo as the key problem.

"I remain concerned about Bosnia's future stability. While neither widespread violence nor a formal break-up of the state appears imminent, ethnic agendas still dominate the political process."

The frozen conflict between Russia and Georgia over control of the Abkhazia and South Ossetia regions and between Armenia and Azerbaijan over Nagorno-Karabakh could more easily lead to bloodshed, he warned:

"The unresolved conflicts of the Caucasus provide the most likely flashpoints in the Eurasia region. Moscow's expanded military presence in and political-economic ties to Georgia's separatist regions of South Ossetia and sporadic low-level violence increase the risk of miscalculation or overreaction leading to renewed fighting."

Mr Blair noted that US-Russia relations have sweetened up in the first year of the Barack Obama presidency. But his portrait of the EU's giant neighbour highlighted several worries.

"I remain concerned, however, that Russia looks at relations with its neighbours in the former Soviet space - an area characterized by President Medvedev as Russia's 'zone of privileged interests' - largely in zero-sum terms," he said.

"Russia continues to use its military in an effort to assert its great power status and to project power abroad, including through the use of heavy bomber aviation patrols, out-of-area naval deployments and joint exercises," he pointed out.

"[It] continues to strengthen its intelligence capabilities and directs them against US interests worldwide. Moscow's intelligence effort includes espionage, technology acquisition, and covert action efforts to alter events abroad without showing its hand."

The intelligence assessment, an annual exercise, also warned about Islamist terrorist activity in Europe.

"Al-Qaida is still plotting attacks against European targets and it has encouraged its affiliates to target European citizens in countries in which the affiliates operate," Mr Daniel explained.

"Networks of Islamic extremists in Europe represent a continued threat because of their access to fighters and operatives with training in Afghanistan, Iraq, Pakistan and Somalia."