Kosovo ready to talk independence with Serbia

PRISTINA, Serbia, July 17 (Reuters) - Kosovo said on Monday it would demand independence from Serbia when the two sides meet this month for the highest-level talks between the two sides since NATO's 1999 air war drove out Serb forces.

U.N. mediators hope to bring together the presidents and prime ministers of Serbia and its United Nations-run, majority Albanian province in Vienna on July 24.

For the first time, Kosovo's international status -- independence or autonomy -- will top the agenda, after six months of lower-level talks on the rights and security of minority Serbs. The West wants a decision within the year.

"The Kosovo delegation will go to Vienna, not to negotiate but once more to argue its case that full independence and sovereignty for our country based on the will of the people ... is the vital solution that must be confirmed," Skender Hyseni, adviser to Kosovo President Fatmir Sejdiu, told reporters.

Serbia has yet to confirm its participation.

Legally part of Serbia, Kosovo has been run by the United Nations since 1999, when NATO bombed to drive out Serb forces accused by the West of civilian killings and ethnic cleansing during a two-year war with separatist guerrillas.

The meeting is not expected to yield any concrete results, the chasm between the two sides seemingly unbridgeable.

AID ONCE STATUS CLEAR

Ninety percent of Kosovo's 2 million people are ethnic Albanians impatient for independence. Serbia has offered wide autonomy for land seen as the sacred cradle of the nation.

But diplomats say Kosovo is heading for independence, under European Union supervision and secured by a NATO peace force that currently numbers 17,000.

In a report to EU foreign ministers meeting in Brussels, EU Enlargement Commissioner Olli Rehn said the bloc intended to be the driving force of the international presence, with the head of that mission also serving as EU Special Representative.

It would monitor the implementation of a status settlement, the rule of law and certain economic and fiscal matters.

"The international presence will need to have some limited intervention powers to ensure that the status settlement is implemented," Rehn wrote, according to a summary of his report, drafted with EU foreign policy chief Javier Solana.

The West is pushing for a deal by the end of 2006, concerned that a delay could spark fresh violence against the U.N. mission and Kosovo's 100,000 remaining Serbs, a ghettoised minority.

The seven-year limbo is blamed for the lack of investment and deep poverty in Kosovo, where unemployment is 50 percent.

Rehn added that the EU and the World Bank would convene a donors' conference once status was settled and the EU would contribute to a "well-coordinated mix of grant assistance, macro-financial support and loans".

(Additional reporting by David Brunnstrom in Brussels)