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The presiding judge at the appeals court in Sarajevo on Monday rejected the plea bargain for former fighter Sasa Zecevic, saying that the proposed punishment was not strict enough.
Around 200 civilian prisoners who were being taken in a convoy from the town of Prijedor to Travnik were executed at Koricanske Stijene on August 21, 1992.
Zecevic, together with former Bosnian Serb policemen Radoslav Knezevic and Marinko Ljepoja, was sentenced to 23 years in prison last June.
Knezevic, who has admitted his role in the killings, has also struck a plea bargain.
Eight other people have already been jailed for their role in the massacre, receiving sentences ranging from eight to 22 years in prison.