Bosnian Serb wartime president Radovan Karadzic, indicted for genocide in the Bosnia war, was captured in disguise near Belgrade after 11 years on the run and had been working as a doctor, Serbian officials said on Tuesday.

The arrest on Monday of Karadzic, who is held responsible for the siege of Sarajevo and the massacre of 8,000 Muslims in the Bosnian town of Srebrenica in 1995, was a condition for Serbian progress towards European Union membership.

He is the most prominent Balkan war crimes suspect arrested since late Serbian President Slobodan Milosevic was sent to the U.N. war crimes tribunal in The Hague on genocide charges in 2001, leaving only two suspects at large.

The Serbian officials said Karadzic was caught while moving from one Belgrade suburb to another. They showed reporters a photograph of an unrecognisable Karadzic, now 63, looking thin, with a long, white beard, flowing hair and thick glasses.

"He happily, freely walked around the city," Serbia's war crimes prosecutor, Vladimir Vukcevic, told reporters. "Even his landlords were unaware of his identity."

Karadzic had wanted Serb areas of Bosnia to be linked to Serbia and other areas dominated by Serbs at a time when Milosevic was fanning nationalism in Serbia.

The trained psychiatrist worked for a private clinic, posing as a specialist in alternative medicine under the assumed name of Dragan Dabic. His last known address was in New Belgrade, a sprawling suburb of concrete tower blocks.

Serbian officials said Karadzic had been served with an indictment and his lawyers had three days to appeal. He is expected to be transferred to The Hague shortly after.

When news of his arrest spread, people in the Bosnian capital Sarajevo poured onto the streets in celebration.

His troops shelled Sarajevo mercilessly in a 43-month siege that lasted throughout the 1992-95 Bosnian war and killed some 11,000 people. Residents haggled for food and scurried like rats over exposed street crossings to avoid snipers' bullets.

JOY IN SARAJEVO

"I called and woke up my whole family," said Sarajevo resident Fadil Bico as cars honked horns and Bosnian state radio played excerpts of Karadzic's wartime hate speeches.

EU foreign policy chief Javier Solana said his arrest showed Belgrade was cooperating fully with the U.N. war crimes court.

EU foreign ministers were due to discuss closer ties with Serbia's new, pro-Western government. U.N. Secretary-General Ban Ki-moon praised Belgrade for taking a "decisive step toward ending impunity" of war crime suspects in the Balkan wars.

Karadzic was indicted in 1995 along with his army commander, General Ratko Mladic, for genocide in Sarajevo and Srebrenica, where unarmed Bosnian Muslim males were rounded up, murdered and bulldozed into mass graves.

Richard Holbrooke, U.S. envoy during the wars of the 1990s' described Karadzic as "a real, true architect of mass murder".

Munira Subasic, head of a Srebrenica widow's association said the arrest "is confirmation that every criminal will eventually face justice."

"I hope that people who had to keep quiet because of Karadzic will start revealing the locations of mass graves and let us find the truth about our loved ones," she said.

Karadzic went underground in 1997 to evade the huge force of NATO peacekeepers that deployed in Bosnia at the end of the war, with part of their brief to find and arrest him.

Alleged sightings were rare. He was said to be hiding in monasteries, disguised, moving between remote hideouts with the help of a network of diehard loyalists.

HUNT FOR MLADIC

His arrest leaves Mladic and Croatian Serb suspect Goran Hadzic still on the run. Serb officials have refused to give exact details on the operation to arrest Karadzic, saying they did not want to blow the chances of arresting Mladic and Hadzic.

"I appeal to the rest of the Hague indictees to surrender," said Serbian Defence Minister Dragan Sutanovac.

Karadzic's arrest showed the two-week-old Serbian government putting pragmatism over pride to help push Serbs towards the EU. The government groups pro-Western Democrats, and Socialists once led by Milosevic, who died in detention at The Hague in 2006.

Many Serbs see the tribunal as biased and prone to laying all the blame for the wars in Croatia, Bosnia and Kosovo on Serbia, but most are keenly aware of the practical benefits of EU membership for their impoverished country.

Nationalists who see Karadzic and Mladic as defenders of the Serb nation staged a few low-key protests.

"This is a dark day in Serbian history. Radovan Karadzic is not a war criminal. He has become a legend," said Tomislav Nikolic of the nationalist Radicals.