That's why I said it was encouraging for those that did no want to compromise like that.Well, I am certain Milošević's refusal played a part, but we shouldn't really consider the leaderships of Srpska and Krajina complete puppets of Serbia. Krajina Serbs also opposed the plan and this also played a big role.
Part of the Krajina leadership clearly felt they should be able to stop Croatia militarily. But the potential of help from Serbia under Milosevic clearly added some extra moral fibre for those that were less certain.
I don't think Tudjman was sincere for a minute in accepting the proposal. The Croatian preference was always the military solution they went for. So the problem really was the kind of winner-take-all brinkmanship all parties were engaged in: Krajina, the Croats, Milosevic etc. Absolutely worst possible situation to try to propose compromise policies. No takers, since everyone is focused on outright victory and the destruction of the adversary.
The thing only might have had some hope if Mislosevic had been seriously on board with the plan, Krajina convinced it would have to come to terms with the Croatians, no real hope of Serbia riding to the rescue, really being up against the wall, and no other way out.
Croatia might still have decided to say "Feck it!" and attack in the end, but politically it would have been much, much more difficult for it. And it's status as aggressor in what everyone else would have thought a settled, peaceful compromise (the kind everyone else likes) would have been clear and apparent.