There was a peace plan offered by international commision, Z4 plan, which called for separation of Krajina in two districts, having an autonomy with language, trade, security. It was in early 1995. Both Serbian and Croatian leaders rejected it. Serbian as they were hoping for unification with Belgrade from as early as 1991 and Croatian as they were confidient that they would solve situation militarily.

But you have to look in what positions Srpska and Krajina were. Serbs in Bosnia were more numerous than Serbs in Krajina, had more success in terms of warfare, also more military equipement and number of troops. Plus Bosnia was much weaker at the time than Croatia. Also, Serbs in Croatia lived in poor and remote areas, without many resources and they had to rely on supplies from Belgrade throughout entire conflict. It is questionable would that entity be sustainable economicaly in the first place.