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The premiers of Serbia and Kosovo on Friday initialled a historic deal to normalise ties in a move key to the future of the Western Balkans, said EU foreign policy chief Catherine Ashton.
"These negotiations have been concluded," Ashton said. "The text has been initialled by both prime ministers."
"What we are seeing is a step away from the past and, for both of them, a step closer to Europe," Ashton said after winding up talks with Serbian Prime Minister Ivica Dacic and his Kosovo counterpart Hashim Thaci.
"The agreement will help us heal the wounds of the past," Thaci said. "This agreement represents the start of a new era, an era of reconciliation and inter-state cooperation."
The EU has brokered two years of talks aimed at easing mutual tensions following Serbia's continued refusal to recognise Kosovo's 2008 unilateral declaration of independence.
Discussions between the two premiers, crucial to future ties with the EU, were the second in Brussels this week after they hurried back on Ashton's request less than 48 hours after the collapse of an earlier round.
Belgrade needed a swift deal to enable EU leaders to give it a date at a June EU summit for the launch of long hoped-for negotiations to join the 27-nation bloc.
Without an agreement by Monday, Serbia's integration into the EU would have been delayed indefinitely.
Pristina for its part has been holding out for a pre-accession pact with the EU to be announced at the same June summit.
Dacic said that "Serbia's proposals were accepted. I initialled a proposed text that both sides will decide upon in the following days to say whether they accept it or refuse it."
Ashton's office would not publish the 15-point text which focuses on how much autonomy to give ethnic Serbs in Kosovo who refuse to recognise Pristina's authority.
Thaci said there would be further examination of the terms and the Serbian government website said it would respond formally to the initialled agreement on Monday.
While there has been considerable progress in two years of talks to reduce tensions, a final accord floundered over the fate of 40,000 ethnic Serbs in north Kosovo who refuse to recognise Pristina's authority and have set up their own "parallel" structures.
Serbia wanted Kosovo to agree to decentralised Serb "municipalities" in the northern enclave with their own police and courts to guarantee ethnic Serbs fair representation in Kosovo.
But Pristina was wary of Belgrade meddling in Kosovo affairs through the Serb community and refused to see "a state within a state" in its north.
Serbian media said Wednesday that the EU was offering a compromise in which the northern Serbs would be guaranteed a fair share of regional and local police chiefs as well as the presidency of a regional court.
The EU offer suggested NATO be put in charge of supervising security, media said.
Serbia continues to refuse to recognise Kosovo's independence, even though more than 90 countries have done so, including the United States and all but five EU member states.
The two premiers later met NATO chief Anders Fogh Rasmussen, who said the alliance stood ready to help implement the accord.
"I am very happy for NATO to contribute to the conclusion of an historic agreement," he said. "NATO will continue to ensure a safe and secure environment throughout Kosovo."
NATO intervened in the breakaway province of Kosovo in 1999 to force the withdrawal of Serb forces and once that was achieved, set up KFOR, now reduced to some 5,000 troops, to ensure security.