Kosovo bids for independence; talks deadlocked

VIENNA, July 24 (Reuters) - Kosovo formally made its pitch for independence face-to-face with Serbia on Monday at their first top-level talks on the issue since NATO bombs drove out Serb forces in 1999.

The one-day meeting in Vienna placed the Albanian majority's demand for independence on the agenda of a U.N.-led mediation process that began in February, seven years since the West intervened to halt a wave of ethnic cleansing and the United Nations took control.

U.N. mediators conceded the two sides remained "far apart".

Kosovo's ethnic Albanian President Fatmir Sejdiu said independence was "the beginning and end of our position." "The will for independence cannot be ignored or negotiated away."

Serb leaders again offered "substantial autonomy".

It was the first time the presidents and prime ministers of both sides had held direct talks since Serbia's 1998-99 war with ethnic Albanian guerrillas. Some 10,000 Albanian civilians died and 800,000 fled, marking the culmination of a decade of Serb repression under late strongman Slobodan Milosevic.

Seven turbulent years later, the West says Kosovo's economic and political limbo is unsustainable. It wants a settlement within the year, which diplomats say will likely bring some form of independence with or without Serbian consent.

"Belgrade would agree to anything but independence," U.N. chief mediator Martti Ahtisaari told a news conference after the meeting. "Pristina would accept nothing but independence."

There were no handshakes, and Serbian Prime Minister Vojislav Kostunica opted out of a joint lunch with the Kosovo delegation, which included two former guerrillas.

"It was business-like," one U.N. official said of the talks.

GOING ITS OWN WAY

Ahtisaari had played down hopes of a breakthrough, given what diplomats say is an unbridgeable chasm between the two sides. Some 90 percent of Kosovo's 2 million people are Albanians who reject any return to Serb rule.

But Serbia sees Kosovo as its "Jerusalem", the cradle of Serbdom and home to scores of centuries-old Orthodox churches.

Kostunica, who says independence would drive Serbian voters into the arms of ultranationalists, said Belgrade "cannot accept the creation of a new state from 15 percent of its territory."

Too late, argued Kosovo negotiator Veton Surroi. "After everything we've been through, it is unrealistic to discuss modalities of autonomy. Kosovo will go its own way."

Ahtisaari opened lower-level direct talks in February on the rights of 100,000 Serbs still in Kosovo, with little success.

Diplomats say the major powers see little alternative to independence. Despite the deadlock, the European Union is going ahead with plans to take on a policing and supervising role.

The United States is pushing hard for a deal in 2006, concerned that delay could spark fresh violence in a territory patrolled by 17,000 NATO soldiers. Russia, a veto holder in the U.N. Security Council and traditional ally of Serbia, has cautioned against any "artificial timetable".

Half the Serb population fled a wave of revenge attacks in 1999. Many who stayed live in isolated enclaves, and view the prospect of independence from Serbia with increasing trepidation. The mainly Serb north has threatened partition.