By Douglas Hamilton

PAKRAC, Croatia, May 5 (Reuter) - Serbs in a Croatian town captured by government troops in an offensive to retake a separatist enclave denied U.N. reports on Friday that their people were being rounded up and homes looted.

European Union monitors in Pakrac dismissed U.N. accounts that Serbs staying put were being mistreated despite the fact that initial information was said to have come from EU sources.

The U.N. Security Council went so far as to censure Croatia for the alleged abuses hours after the reports surfaced. The Croatian government denied the accusations on Friday.

U.N. special envoy Yasushi Akashi, visiting Pakrac on Friday to take a look for himself, said "ethnic cleansing" did not appear to have occurred as earlier thought.

Guenter Baron, an EU monitor, told Reuters Croatian troops had detained 1,700 Serb men from the reconquered rebel half of town on Thursday night and bused them away but that they were only normal prisoners of war.

They were collected after Croatian troops crushed the last pocket of rebel Serb resistance in the Western Slavonia region retaken in a blitz over U.N. truce lines this week.

Baron said the male Serbs were taken in 20 buses to Bjelovar and Varazdin where they were lodged in schools and given a good meal and allowed to take showers.

"The Croatian operation was excellent, professional, competent and correct," he told Reuters.

EU sources said earlier that Serb women and children were also bused away after being separated from menfolk and a U.N. peace force (UNCRO) spokesman spoke of expulsions.

In Zagreb, Croatian military police spokesman Mato Lausic said 168 Serb civilians from Pakrac had been put in a hotel in Kutina where they were safe and well treated. Akashi, who tried to fly into Pakrac when diehard Serb paramilitaries surrendered on Thursday and was turned back by the Croatian army, toured the town on Friday in the company of Croatia's interior minister and chief peace negotiator.

Asked by reporters if he knew of EU monitors' assessment that civilian and disarmed militiamen had not been molested and whether he agreed with them, Akashi said hesitantly, "Yes."

He said Croatian leaders had assured him that the several thousand Serbs still in Western Slavonia -- some 10,000 fled to Bosnia -- would be accorded full civil rights.

"We have also been assured our observers will have freedom to visit camps where people are held," he said, a day after UNCRO complained of severe curbs on movements of its personnel.

Foreign journalists allowed to tour the Serb side of Pakrac on their own found no obvious signs of human rights abuses.

There was no evidence of widespread ransacking of houses, a feature of "ethnic cleansing" in wars in Croatia and Bosnia sparked by their secession from multinational Yugoslavia.

The neighbourhood appeared deserted at first with only chickens, dogs and piglets running about. But local people slowly emerged from houses to talk. They were upbeat, saying they knew of no expulsions or looting.

"No problems, no problems. So far no problems at all. Police are treating us well," said Ljuban Pavkovic, 50.

Croatian deputy Interior Minister Josko Moric personally assured remaining Serbs they could count on the police and Croatian authorities for security and assistance.

"Please tell us if anything is wrong, if anyone from the police treats you badly. Because there must be no problems here," he told local Serbs in the presence of reporters.

One local, Ljuban Paskovic, 55, said Serb paramilitaries urged his family to flee but they stayed.

"I'm not afraid of revenge by the Croats. I'm prepared to stay on under Croatian administration with no fear of being trated as a second class citizen." Not everyone was composed.

Seven Croatian army reservists passed by in two cars with Krajina Serb number plates, obviously stolen. They were swiftly stopped, lined up in the road by the local Croatian military police commander, loudly rebuked and arrested.