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By Alexandra Hudson

THE HAGUE, March 12 (Reuters) - A Croatian offensive to retake a Serb-held enclave in 1995 had U.S. backing and ultimately brought peace to former Yugoslavia, lawyers for former Croatian general Ante Gotovina said on Wednesday.

Gotovina went on trial at the U.N. war crimes tribunal on Tuesday charged with orchestrating a campaign of murder and plunder to drive up to 200,000 Serbs from the Krajina region in Croatia, declared a Serb republic by ethnic Serbs in 1991.

Prosecutors said Gotovina and his fellow accused -- generals Ivan Cermak and Mladen Markac -- were responsible for the killing of hundreds of Serbs and the shelling and torching of towns as Croatian forces retook the Krajina region in 1995.

"Operation Storm", the Croats' military offensive to reclaim Krajina, was designed to expel Serbs and ensure they had nothing to which they could return, they added, leaving behind a wasteland of destroyed villages and homes.

All three have pleaded not guilty.

Gotovina's defence lawyers said attacks were not excessive and "Operation Storm" had the backing of the United States. It sought to thwart advancing Bosnian Serbs who aimed to join Krajina with a "Greater Serbia" across former Yugoslavia.

"What is the bad act that General Gotovina committed?" asked defence counsel Luka Misetic.

The defence contrasted footage of the devastation wrought by Serbs on Croatian towns such as Vukovar with what they described as the minimal shelling of Krajina towns such as Knin.

They also played a video interview with a Catholic bishop who explained how Gotovina had come to see him to seek guidance on Catholic teachings about ethical conduct in warfare.

RIGHT OR WRONG

"There was one person that brought about the demise of the Bosnian Serb army with Ratko Mladic at its helm ... and brought the carnage in the former Yugoslavia to an end," defence counsel Gregory Kehoe told the court, gesturing to 52-year-old Gotovina.

"This was a man who never lost sight of what he thought was right or wrong in leading his men in battle."

Bosnian Serb wartime leader Radovan Karadzic and military commander Mladic, the tribunal's two top war crimes suspects who are indicted for genocide over the 1995 Srebrenica massacre of 8,000 Bosnian Muslims, are still on the run.

Kehoe said Gotovina's defeat of the Bosnian Serbs brought them to the negotiating table and helped end a Serb "reign of terror". As an operational commander, he was not responsible for activities going on behind the front line, he added.

Years of international pressure on Croatia to deliver its last war crimes suspect ended in 2005 with Gotovina's seizure in Spain's Canary Isles. His capture triggered large protests in Croatia, where many see Gotovina as a war hero, but also an invitation to Zagreb to start European Union accession talks.

The mountainous Krajina region, which skirts the borders of Bosnia in southern and central Croatia, had been heavily settled by ethnic Serbs for centuries.

After Croatia declared independence from Yugoslavia in 1991, they drove out around 80,000 Croats in a campaign of "ethnic cleansing" that has also led to convictions in the Hague.

Now just over a quarter of Krajina's original ethnic Serb population have returned. Most of those who have not blame poverty, a lack of jobs and discrimination. The European Union has called on Zagreb to do more on minority rights. (editing by Elizabeth Piper)

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