A landmark world court ruling, that Serbia failed to prevent the 1995 slaughter of thousands of Bosnian Muslims but is not guilty of genocide, seems unlikely to "close the page of history" and lead to badly needed reconciliation in the Balkans.

Yesterday's carefully nuanced verdict of the International Court of Justice, in an unprecedented case of a state being tried for humanity's worst crime, was greeted with anger and dismay by Bosnian Muslims and disappointment by some human-rights groups.

But Serbian authorities said the judgment went some way to removing what many Serbs believe is an unfair stigma.

Serbian President Boris Tadic said Serbia, the successor state of Slobodan Milosevic's disintegrated Yugoslavia, was rightfully vindicated of direct responsibility. But "the part of the judgment that said that Serbia did not do all in its power to prevent genocide against Bosnians in Srebrenica is very hard."

Javier Solana, the European Union's foreign policy chief, said he is happy the court did not impose "collective punishment."

"The verdict . . . I think is something to be welcomed," Mr. Solana told reporters in Brussels. "One thing that we appreciate very much is no collective punishment. We think it will contribute to close the page of history - that was dramatic, very painful, very damaging for many, many people."

The verdict was met with bitterness among relatives of more than 7,000 Bosnian Muslim males massacred by the former Bosnian Serb Army commanded by General Ratko Mladic and among the political leadership in Sarajevo.

"Shame on the people who reached such a verdict. How can they say not guilty of genocide when there are photos, video footage?" The Associated Press quoted Zinaida Mujic, of the Mothers of Srebrenica Association.

"They are again torturing our people, these mothers. My two sons were killed, massacred."

In the 171-page ruling, the court was unambiguous in its declaration that genocide had occurred at the United Nations-protected Srebrenica enclave and that during the 1992-95 conflict, "Bosnian Muslims were systematically victims of massive mistreatment, beatings, rape and torture causing serious bodily and mental harm." But it rejected Bosnia's assertion that Serbia was responsible and that its intent was to wipe out Bosnian Muslims.

Rather, the judges said, Belgrade stood by and allowed it to happen and they demanded that Serbian authorities hand over Gen. Mladic.

He and Bosnian Serb leader Radovan Karadzic have been evading arrest since being indicted on genocide charges by the Yugoslav war crimes tribunal.

"The court has found that [Serbia] could, and should, have acted to prevent the genocide but did not," said president Rosalyn Higgins, a British jurist.

She said Yugoslavia, led by Mr. Milosevic (who died in custody last year while being tried for genocide and war crimes) "could hardly have been unaware of the serious risk" of genocide since they "were fully aware of the climate of deep-seated hatred which reigned between the Bosnian Serbs and the Muslims in the Srebrenica region."

Frank Chalk, co-director of the Montreal Institute for Genocide and Human Rights Studies at Concordia University, said in an interview that this was the weakest part of the judgment in that it provides for no sanctions against Belgrade.

"It's extremely galling," he said.

Serbia has said it has been unable to arrest Gen. Mladic, seen as a hero by many Serbs, but UN prosecutors say he has evaded capture with the help of Serb security forces.

But Mr. Tadic said co-operating with the Yugoslav war crimes tribunal is crucial to Serbia future. "Unless Serbia finally wraps up that co-operation . . . I believe, as a state, it will face dramatic political and economic consequences," he said.

In a relief to Serbia, the court also refused Bosnia's request for financial compensation, saying it "is not the appropriate form of reparation for the breach of the obligation to prevent genocide."

New York-based Human Rights Watch said that state genocide is extremely difficult to prove but that does not preclude future cases.

"The abuses at Srebrenica were committed by Bosnian Serbs, not Yugoslav government forces," Ben Ward, an associate director in the Europe division of the organization, told The Guardian.

But he welcomed yesterday's decision as setting a historic precedent.

"This is the first time this has been used, and it does open the door to further claims," he said.

Two Bosnian Serb officers have been convicted by the International Criminal Tribunal for the former Yugoslavia for war crimes related to the conflict. Gen. Radislav Krstic is serving a 35-year prison term for aiding and abetting genocide, and Col. Vidoje Blagojevic is appealing his 18-year sentence for complicity in genocide.