BRUSSELS (Reuters) - Serbia and Kosovo failed to agree on a plan to tackle the ethnic partition of Serbia's former province on Thursday, casting doubt on Belgrade's prospects of getting the go-ahead to start talks on joining the European Union in June.
After around 14 hours of talks in Brussels between the Serbian and Kosovo prime ministers, billed as a make-or-break session, EU foreign policy chief Catherine Ashton said differences remained between the two sides.
She said however that their differences were "narrow and very shallow" and held out hope there could yet be an agreement before an EU ministerial meeting on Monday at which she is expected to make a recommendation on whether Serbia is ready to start talks on joining the EU.
"We have some hours left. I hope in that time, that both delegations will reflect on whether they can take the final steps necessary to finish this agreement and to move their people forward into the future," she said in a statement.
Agreement between Serbia and Kosovo is seen as crucial to Belgrade's chances of securing approval from EU leaders at a June summit to open talks on joining the 27-nation bloc.
Membership talks would be a milestone in Serbia's recovery from a decade of war and isolation under late strongman Slobodan Milosevic and provide a much-needed boost for its ailing economy, still the biggest in the former Yugoslavia.
Kosovo broke away from Serbia in 1998-99, when NATO waged an 11-week air war to halt the killing and expulsion of ethnic Albanian civilians by Serbian forces trying to crush a guerrilla insurgency. Kosovo declared independence in 2008 and is recognized by more than 90 countries, including the United States, but Serbia does not recognize its secession.
Serbia retained de facto control over a small, Serb-populated pocket of north Kosovo, in an ethnic partition that frequently flares into violence and that the EU says must end.
Kosovo Prime Minister Hashim Thaci said he had accepted proposals on normalizing relations with Serbia that Ashton had put forward but that Serbia had rejected them.
Serbian Prime Minister Ivica Dacic said the plan put forward by Ashton was much more acceptable to Belgrade than earlier proposals had been.
"It is clear however that Pristina (the Kosovo capital) is not ready to go to the very end and that it is obstructing these talks ... and even threatens to resolve the issue of northern Kosovo with some other methods," he said, without elaborating.
Both leaders voiced hope that an agreement could yet be reached.
The standoff over north Kosovo has frustrated plans by NATO to further cut back its Kosovo peace force, which now numbers 6,000 soldiers.
In a major U-turn in official policy, Serbia's ruling coalition has offered to recognize the authority of Pristina over the North, but wants autonomy for some 50,000 Serbs living there.
The EU has mediated in talks between Kosovo and Serbia for the past six months, but the talks have run into trouble over the powers Serbs would wield, particularly over policing and courts. The Serbs also want a guarantee that Kosovo's future army will not be allowed to enter the North.
Dacic said after the latest talks that Kosovo was attempting to link police command in northern Kosovo with a request that Serbia not block Kosovo's membership of international organizations. He said this was tantamount to recognition of Kosovo as a state and Serbia could not accept it.
Ashton had summoned Dacic and Thaci back to Brussels for last-ditch negotiations just two weeks after declaring the talks over. The EU's executive Commission, which had been due to issue a recommendation on Serbia's readiness for membership talks on Tuesday, delayed its decision to allow another chance to seal a deal.
Writing by Adrian Croft; Editing by Eric Beech and Cynthia Osterman