They announced that after the recent arrest of former Hypo Bank CEO Wolfgang Kulterer, new arrests would be made next week, but would not reveal who would be arrested or where arrests would be made.

Hypo Bank has suspicious uncollected loans in 12 countries amounting to eight billion euros, of which several hundred million euros worth of loans was discovered in Croatia, Holub, who chairs the Carinthian parliamentary commission, told reporters in the northern Croatian Adriatic city.

Holub said that this was why the commission was looking into connections between politicians and bankers in all countries where Hypo Bank operated.

The commission is particularly interested in whether money syphoned off from the bank was used to finance political parties, Holub said, adding that Croatia too should set up a similar commission to investigate the role of Croatian politicians in the case.

The Austrian official said that members of the commission on Thursday visited the Skiper project in the northern Savudrija Bay, a former wine cellar in Umag, and a marina in Novigrad. He said the commission would today visit Dragonera and land owned by former politician Ivic Pasalic.

Answering a reporter's question, Holub said that Istria County Prefect Ivan Jakovcic, who would soon testify in Klagenfurt, was not under investigation in this case.

Peter Pilz, a member of the Carinthian parliamentary commission and deputy in the Austrian parliament, said that once all available information was collected, a parliamentary investigation would be launched in Austria, most probably in mid-2011, into the illegal sale of weapons to Croatia and bank accounts of Vladimir Zagorec, as well as into the sale of land in Istria and into how money was syphoned off from Hypo Bank.

What is at issue is two billion euros in secret bank accounts in Austria, which was returned to Croatia via Hypo Bank to be used for cheap land purchase, Pilz said.

He added that the investigation covered the period back to 1992, when Croatia bought via Austria most of the weapons used for its defence.

Holub and Pilz said the purpose of the investigation was to identify Austrian and Croatian politicians who took part in the import of weapons into Croatia, and to shed light on operations of Hypo Bank in Austria and Croatia.

The two officials said that money from the illegal sale of weapons, amounting to two billion euros, arrived in Austria through different channels and was deposited in secret bank accounts.

The money was then returned to Croatia through Hypo Bank, and was used to buy land cheaply, including land in Istria. Military services in Vienna have documents from 2001 which again identify as the key persons Franjo Tudjman, Vladimir Zagorec and ten other Croatian politicians. We must investigate all of that, Pilz said, declining to reveal the politicians' names.

Istria County Prefect Ivan Jakovcic held a news conference in Porec today, expressing satisfaction with his talks on Thursday with members of the Austrian commission, saying that he had prepared for them all documents on loans granted to Istria County by Hypo Bank and on the conversion of land in Barbariga and Dragonera.

Jakovcic said that he asked the commission to make it possible for him to see the Carinthian government's record of meetings, because a Croatian weekly recently made false allegations against him, reporting about his secret talks with Joerg Haider, the former Governor of Carinthia who died in a car accident in 2008.

Jakovcic said that Bruno Poropat, former chairman of the Istria County Assembly Committee on Physical Planning, and Bruno Nefat, former director of the Istria County Institute for Physical Planning, were responsible for land conversion.

"Those people are in political groups that have been trying for a dozen years to accuse me of something I am not guilty of," Jakovcic said, adding that he would continue to cooperate in efforts to shed light on the Hypo Bank case.

Answering a reporter's question, he confirmed that he had met twice with Haider at an international conference on the establishment of the Euro-region in Italy.

He added that Ivic Pasalic was not mentioned at his talks with the Austrian commission of inquiry.