This article deals with the relationship between the ethnic and societal security dilemmas on the one hand, and the way in which elites seek to prevent local-level cooperation through ‘costly signalling’, on the other. By analysing transcripts of tape-recorded conversations from the Security Council of the Republic of Croatia during the period 1992–95, the author shows that the Croatian elite based its initial strategy on the widespread fear that Croats would become dominated in an independent Bosnia and Herzegovina. It was during this phase that Franjo Tuđman and parts of the Bosnian Croat elite voiced the idea that parts of Bosnia and Herzegovina should—at least as a contingency—be joined with Croatia. However, the elite in Zagreb began backtracking in early 1992, when it became clear that the international community would not allow such a turn of events. It is also shown that fears of political domination began transforming into security concerns in the second half on 1992 due to the increasing tensions between the Bosniak and Croat armed forces. The final part of the analysis shows how local elites used nationalist symbols and the presence of foreign Mujahedin fighters in the vicinity of Zenica for the purpose of ethnic mobilization in the spring of 1993.