Annan pushes for compromise in Serbia-Kosovo talks

UNITED NATIONS, Sept 12 (Reuters) - U.N. Secretary-General Kofi Annan pressed Serbia and Kosovo on Tuesday to be more flexible in their talks on the fate of Serbia's breakaway province, to help pave the way toward a compromise.

"It is the responsibility of the parties to find common ground and a sustainable solution, acceptable to both sides," Annan said in his latest progress report to the U.N. Security Council on the course of the "final status" negotiations.

Kosovo has been under U.N. administration since 1999 following a NATO bombing campaign that drove out Serb forces accused of ethnic cleansing. Ninety percent of the southern Serb province's 2 million people are ethnic Albanians.

U.N.-brokered talks are underway to determine whether Kosovo will remain part of Serbia, as sought by the government in Belgrade, or become independent, as the vast majority of Kosovo's residents insist.

The talks began in February and U.N. officials hope to wrap them up by the end of the year.

But there has been little hint of a breakthrough in the negotiations, which have focused so far on the rights and security of the 100,000 Serbs still living in Kosovo.

Annan said he was disappointed that little common ground had been identified between the Serbian and Kosovo delegations, leaving "minimal space for negotiation."

"I again call on both sides to engage in these talks in a spirit of compromise," he said.

In Pristina on Monday, Kosovo's latest U.N. governor, German diplomat Joachim Ruecker, dismissed as "speculation" reports the talks were lagging and said U.N. mediator Martti Ahtisaari was on course to make his proposal on Kosovo's final status within the next three months.

A U.N. Security Council resolution approving the proposal could swiftly follow, he told Reuters.