A spokesman on Saturday said police had received information that wartime Bosnian Serb leader Karadzic, wanted by the UN war crimes tribunal in The Hague, was near the town of Bratunac in a nationalist region bordering Serbia.
"This was the reason to engage a large number of police forces in the search operation," said police spokesman Dragomir Peric.
"The operation has not yielded any results yet and it will last as long as there is justification for it to go on," he said.
It would be one of the first big actions to hunt down Karadzic by Bosnian Serb authorities, often accused by the West of not doing enough to arrest war crimes suspects, which is a key condition for closer ties with the rest of Europe.
A spokesman for the NATO-led SFOR peacekeeping force, which has stepped up its hunt for Karadzic in recent months, said some of its units were supporting police in the action, but he did not confirm they were looking for Karadzic.
"I cannot go into details of this operation," said Captain Dave Sullivan.
Peric said 150 police officers were involved and carried out checks of cars and individuals at several places near the border. "We are also using this operation to track down other individuals charged with other criminal activities."
International community wants
Bosnian Serb officials to do more
A Reuters cameraman in Bratunac saw dozens of special and regular police in and around the town and an armoured personnel carrier. Armed police clad in balaclavas manned a checkpoint in nearby Bjelovac village, on a road leading to Serbia.
Western officials and the Hague tribunal have often criticised the Bosnian Serb government for not arresting Serb war crimes suspects believed to be hiding on its turf.
They have made clear this failure could hurt Bosnia's efforts to seek closer ties with the European Union and NATO.
The US ambassador for war crimes, Pierre-Richard Prosper, warned Bosnian Serb leaders this month they would face increased international pressure unless they did more to find Karadzic and his wartime military commander Ratko Mladic.
“NATO will judge you not on words, but on your actions, or lack of them," he told the Bosnian Serb parliament on 4 March.
Karadzic and Mladic, both indicted for alleged genocide against Bosnian Muslims during the 1992-95 war, are still regarded as heroes by many Serb nationalists.
But Bosnian Serb Interior Minister Zoran Djeric was quoted as saying this week that police would arrest them if the opportunity arose, but that they did not know their whereabouts.