* Bosnia divided over assassination that started World War One
* Rival commemorations highlight differences over Serb role
* Anniversary coincides with renewed tension between world powers
By Matt Robinson and Daria Sito-Sucic
SARAJEVO, March 11 (Reuters) - The woman paused before a photograph of a young man with dark eyes and a tightly trimmed moustache.
"That's that Serb terrorist those Chetniks (Serb nationalists) are praising," she said to a journalist inspecting the image. "He started that war. They started all the wars."
Gavrilo Princip stared down from the outer wall of a museum at the riverside spot in Sarajevo where on a summer's morning in 1914 he opened fire on the heir to the Austro-Hungarian throne.
The killing of Archduke Franz Ferdinand and his wife, Sophie, lit the fuse for World War One, turning out the lights on an age of European peace and progress.
Empires crumbled and more than 10 million soldiers died. The world order was rewritten. Yet 100 years on, in Princip's native Bosnia, time, in many ways, has stood still.
A hero to some, a harbinger of destruction to others, the assassin is being fought over anew as Sarajevo prepares to mark the June 28 centenary of his act.
Two rival sets of events are being planned, and accusations of 'revisionism' are flying at a time of renewed Cold War-style tensions between East and West.
The row goes to the heart of Bosnia today, a country still affected by big-power divisions and still arguing about the past, divided by the present and uncertain about the future.
"We haven't moved on," said Bosnian historian Vera Katz. "It's like we're 100 years before 1914, not 100 years after."
Sarajevo bookended the 20th century, opening with Princip's Browning revolver and closing with the sniper rifles and mortars of his ethnic kin besieging the city from the hills during Bosnia's 1992-95 war.
To some, like the woman at the museum, the two events were part of the same arc of Serb nationalism.
According to that narrative, Princip was a 'terrorist' bent on uniting Orthodox Serb lands at the expense of Bosnia's Muslim Bosniaks and Catholic Croats.
Bosnian Serb forces under Ratko Mladic attempted just that eight decades later.
Sarajevo mayor Ivo Komsic, a Bosnian Croat, noted the city's role in the two wars that framed the last century when unveiling plans for the centenary last month.
"The eyes of the world will be focused on Sarajevo once more and it is important that we send messages completely different from the messages of war sent in 1914 and 1992," he said.
Such comparisons have riled Serbs in Bosnia and neighbouring Serbia, for whom Princip is a pan-Slavic hero, the shot he fired marking the death knell for centuries of foreign occupation over Serbs, Croats and Bosniaks alike.
This was the official narrative for decades in socialist Yugoslavia, when Princip was venerated as a freedom fighter for all the nations and faiths gathered together by Josip Broz Tito.
Schools and roads took the assassin's name. His footprints were enshrined in the pavement at the spot from which he fired.
In his native mountain region of Bosansko Grahovo, a plaque erected in 1949 still stands above the doors to the local school, hailing Princip's "fearless" fight for the "national freedom of our peoples".
Today, the plaque is blackened, licked by the flames that razed the school in 1995 as Yugoslavia crumbled.
Sarajevo, now inhabited largely by Bosniaks, plans to mark the centenary of the assassination with a series of cultural events sponsored in large part by France and also with the help of Austria and possibly the European Union.
It will take place at a sensitive time in international relations, with Western nations accusing Serb big power backer Russia of preparing to annex Crimea from Ukraine and Moscow arguing it is defending Russians from Western stooges in Kiev.
Organisers of the Sarajevo commemoration, who are hoping to get funding from the EU, say it will steer clear of the issue of whether Princip was terrorist or hero.
The centrepiece will be a concert of the Vienna Philharmonic in the city's much-loved Vijecnica, Sarajevo's city hall-turned-National Library that burned down at the start of the 43-month Bosnian Serb siege of the city. The concert will mark its reopening.
On June 27, French philosopher Bernard Henri-Levy, who supported the Bosniak call for Western intervention to halt the war in Bosnia, will premiere his latest play in Sarajevo, which deals specifically with the 1992-95 conflict.
Bosnia's autonomous Serb Republic has refused to participate, except in a leg of the Tour de France cycling race in the capital on June 20-23.
Instead, the Serbs plan their own ceremony in Visegrad, a town made famous by Ivo Andric's 1945 novel 'Bridge on the Drina', and infamous by Serb paramilitaries who tossed their victims from the Ottoman bridge in 1992 as the first waves of the war washed through eastern Bosnia.
"WE BUILD AND WE DESTROY"
The Serb events will be choreographed by filmmaker Emir Kusturica, a Sarajevan born into a Bosniak family but who later took on the Serbian Orthodox faith, who plans to stage an opera about the assasination and show a documentary about Princip.
Authorities in Serb-controlled East Sarajevo say plans are in the pipeline for a statue of the assassin.
"We once all lived in one state (Yugoslavia), and we never looked on it as any kind of terrorist act, as some historians try to present it today," said Nenad Samardzija, the Serb mayor of East Sarajevo.
"We looked on it as a movement of young people who wanted to liberate themselves from colonial slavery."
The contradictions are inevitable, said sociology professor Slavo Kukic.
"Through no fault of his own, Gavrilo Princip is the result of all those political conflicts and differences on the territory of the former Yugoslavia ... over the past quarter of a century," he said. "We've had many Gavrilo Princips in our recent past."
The demands of each side in Bosnia have changed little since its war - while the Bosniaks want a more centralised, unified state, the Croats say they need their own entity like the Serbs.
Serb leaders, meanwhile, look east to Serbia, saying they have little need for Bosnia at all, much as pro-Moscow forces now in Crimea are looking to Russia and rejecting Ukraine.
The political system put in place in Bosnia by a U.S.-brokered peace deal in 1995 divvied up power along ethnic lines, fuelling corruption, stifling development and triggering unrest last month unprecedented since the war.
The historian Katz, her office unheated since the war because the state History Institute can't afford the bills, said all the centenary plans were inappropriate given the far more pressing economic and political problems facing Bosnia.
"It's like putting on makeup when you haven't even had a bath," she said.
Princip's house is one of hundreds of gutted homes scarring the bleak plateau, untouched since they were sacked by Croat forces on the heels of fleeing Serbs at the end of the Bosnian war. The Sarajevo footprints have gone.
Spared the death sentence because he was not yet 20, Princip died of tuberculosis in his jail cell in 1918.
The turbulent century that he set in chain scattered his relatives around the globe. But one who was given his name, Gavrilo, still resides in East Sarajevo, where he runs a hotel.
Serbs who fled Princip's native region are collecting money to rebuild the family home in time for the centenary. The house was razed three times, during the two world wars and again in 1995. They're wasting their time, said Gavrilo.
"It will be burned down and destroyed again," he said. "We build and then we destroy. That's how things are in Bosnia." (Writing by Matt Robinson; editing by Philippa Fletcher)