Prosecutors say Croatia illegally shelled Serb civilians and torched their homes as they fled during the blitz known as Operation Storm.
Prosecutor Alan Tieger acknowledged Monday that Croat authorities ordered troops not to commit crimes as they retook the Krajina region, but said they never intended the orders to be followed.
Tieger was summing up the case against three Croatian generals accused with commanding forces involved in the campaign.
The generals, Ante Gotovina, Mladen Markac and Ivan Cermak, have pleaded innocent and are regarded as heroes in their homeland.