PRISTINA, Serbia and Montenegro, April 14 (Reuters) - Kosovo Albanians won rare praise on Friday for reaching out to the province's Serbs, a key demand of the West as it answers an Albanian bid for independence from Serbia in talks in Vienna.
Frank Wisner, the U.S. envoy in the negotiations, welcomed efforts by President Fatmir Sejdiu and Prime Minister Agim Ceku to improve the lives of the remaining 100,000 Serbs, a ghettoised minority.
"Your authorities have undertaken important steps to build a spirit of national confidence, national reconciliation, making it clear that all the citizens of Kosovo have a home here," he told reporters.
Western powers have indicated independence for Kosovo's 2 million people could come this year, provided the 90-percent ethnic Albanian majority offers the Serbs a viable future. Following a period of stagnation and international criticism at the turn of the year, the U.N. mission says Kosovo's new leadership has revived efforts to meet a raft of democratic standards set by the West. The mission has been running Kosovo since the 1998-99 war.
Serbia lost control of its southern province in 1999, when NATO bombs drove out Serb forces accused of killing and expelling ethnic Albanian civilians in a two-year war with separatist guerrillas, the culmination of a decade of Serb repression.
Around half the Serb population fled a wave of revenge attacks. Those who stayed lead a grim existence on the margins of society and were targetted by sporadic, sometimes explosive, violence.
After seven years of U.N.-imposed limbo, and growing Albanian frustration, Western powers say they want a decision on Kosovo's "final status" within the year.
Former Finnish president Martti Ahtisaari, who heads the U.N. team mediating the Kosovo talks in Vienna, said he wants to wrap up discussion of technical issues such as minority rights and church protection by July. He will then report to the U.N. Security Council before addressing the crunch issue of status.
Serbs and Kosovo Albaninas will meet again in Vienna on May 4 to continue talks on how to strengthen local self-government in Serb areas.
Serbia insists independence for its southern province -- the so-called cradle of Serbdom stretching back 1,000 years -- is unthinkable.