SARAJEVO, Bosnia-Herzegovina (AP) _ Government forces apparently captured the stronghold of a rebel Muslim leader in northwest Bosnia on Sunday, authorities said.

Bosnian radio said the army had entered the town of Velika Kladusa, headquarters of rebel leader Fikret Abdic. It said Abdic had likely fled the town.

Fighting continued in hills surrounding Velika Kladusa, the report said.

An end to warfare in the Muslim enclave of Bihac would allow the Bosnian government to divert more troops to confront its main enemy, the Serbs. It also could increase pressure on Bosnian Serb leaders to accept an international peace plan they have repeatedly rejected.

U.N. officials in Velika Kladusa also spotted Bosnian army units in the town, said Maj. Dacre Holloway, a U.N. spokesman in Sarajevo.

Abdic's supporters were leaving their guns and fleeing, Holloway said, joining a stream of several thousand frightened civilians seeking refuge just across the border in Serb-controlled sections of Croatia.

The overnight assault followed U.N.-mediated talks on Saturday that failed to reach agreement on ending the fighting. The talks had been scheduled to resume on Sunday.

Abdic rebelled against the Muslim-led Bosnian government last year and allied himself with the Serbs in Croatia and Bosnia, who surround the so- called Bihac pocket of northwest Bosnia.

Bosnia's minority Serbs started the war in April 1992 when they rebelled against Muslim and Croat moves to secede from Yugoslavia. An estimated 200,000 people have been killed.