With the outbreak of World War II, Ljotić supported Yugoslavia's policy of neutrality in the conflict while promoting the position that Yugoslav diplomacy should focus on relations with Berlin. He vehemently opposed the August 1939 Cvetković–Maček Agreement and repeatedly wrote letters to Prince Paul urging him to annul it. In these letters, he advocated an immediate re-organization of the government according to Zbor ideology, the abolishment of Croatian autonomy, the division of the Royal Yugoslav Army into contingents of ethnic Serbs and some Croat and Slovene volunteers, who would be armed, and contingents of most Croats and Slovenes in the armed forces, who would serve as labour units and would be unarmed. Effectively, the purpose of all these points was to reduce non-Serbs in Yugoslavia to the status of second-class citizens. By this point, Zbor was infiltrated by the German Gestapo, the Abwehr (German military intelligence), and the Schutzstaffel (SS). In 1940, the Royal Yugoslav Army purged its pro-German elements and Ljotić lost much of the influence he held over the armed forces.
