Sarajevo - Thousands of Bosnian war veterans, joined by their families and labour unions, rallied in Sarajevo on Thursday to protest planned cuts of their pensions.

The size of the crowd, estimated at 4,000, disappointed the organizers, who had been expecting 50,000 people affected by the upcoming belt-tightening.

Pressed by the financial crisis, the Muslim-Croat part of Bosnia, the Federation Bosnia-Herzegovina, announced an emergency 10-per- cent cut of all salaries and pensions paid from the budget.

A US-brokered peace deal internally divided Bosnia along ethnic lines in 1995 to end the war, setting up the Federation and the Serb Republic as two nearly-sovereign entities within the common state.

Reduced spending was among the key conditions the International Monetary Fund laid out to Bosnia for a three-year, 1.2-billion-euro (1.6 billion dollars) standby credit.

According to the deal Bosnia struck with IMF in May, the Federation BH must save 211 million euros, or more than one-fifth from the 2009 budget.

The Serb part must cut only 74 of the planned 852 million euros in spending.

Bosnia has had two stand-by arrangements with the IMF, worth 240 million dollars, between 1998 and 2004. (dpa)