He wanted to compromise because Republika Srpska had taken most of BiH at the start of the war and probably didn't see things getting better.

Yes. Until he got full support from NATO who started bombing Serbian positions that sparked military advancements of joint Bosniak-Croat forces. Then he wanted to maximize the peace deal to his favor by making the Bosnian muslims lead the whole country.

Yes, makes perfect sense then that a Serb general was doing the 'exterminating' ::) And I'm assuming you're referring to this document? No where does it claim that.

Well, I would agree Serbs did crimes in easter Bosnia, killed and forced people to leave but let's not attribute it to one side only? It was motivated by nationalism and ethnic superiority complex on all sides and general distrust towards others. Here's what the document says that you provided talking about why some European governments were so relluctant to support ending of war in Bosnia: "To Holbrooke's list I would like to add a sixth factor: some European leaders were not eager to have a Muslim state in the heart of Balkans, fearing it might become a base for exporting extremism, a result that their neglect made more, not less, likely."
Alija's government created close ties with Iran prior to the dissintegration of Yugoslavia.