By Aaron Gray-Block

THE HAGUE, Nov 18 (Reuters) - The U.N.'s highest court ruled on Tuesday it had jurisdiction to examine Croatia's accusation that Serbia committed genocide in the 1992-95 Bosnian war.

The International Court of Justice ruled that Serbia was bound by the 1948 Genocide Convention and that the tribunal had jurisdiction in the case up until at least November 2000 when Serbia became a member of the United Nations.

The 17-judge court said it would examine Serbia's objection that it cannot be held accountable for any breach of the genocide convention prior to its creation as a state in April 1992.

"We are still considering all options including out of court settlement and filing a counter suit," Serbia's Justice Minister Snezana Malovic told journalists in Belgrade. "However, we hope that the court's final decision will be in Serbia's favour."

In a suit filed in 1999, Croatia is seeking reparations from Serbia on the grounds that the Belgrade authorities were liable for ethnic cleansing committed against Croatian citizens, including killing, torture, displacement and destruction of property.

Serbia objected, arguing it was not a member of the United Nations and therefore not a party to the UN court when the 1999 lawsuit was filed and that it was not bound by the genocide convention. It also denied genocide took place.

The UN court noted that Serbia said it would take on the international obligations of the former Socialist Federal Republic of Yugoslavia, including its participation in international treaties, in an April 1992 declaration to the UN.

It ruled that this represented a notification of succession to the obligations of the genocide convention and that Serbia was therefore bound by the treaty, granting the court jurisdiction to hear the case.

About three-quarters of the 100,000 people killed in the Bosnian war during the break-up of the former Yugoslavia in the 1990s were Muslims and Croats.

The court has yet to set dates for full proceedings in the case. (Additional reporting by Svebor Kranjc and Ivana Sekularac in Belgrade; Editing by Charles Dick)

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