By Aleksandar Vasovic and Fatos Bytyci
BRUSSELS/PRISTINA (Reuters) - Serbia's hopes of starting talks this year on joining the European Union hung in the balance on Thursday after it balked at demands from its former province of Kosovo for a seat at the United Nations.
Kosovo said the EU had summoned both sides back to Brussels for further talks on Friday, before the EU's 27 members consider on Monday whether to recommend the start of accession talks with Serbia, a process crucial to unlocking its potential as the largest market in the former Yugoslavia.
The talks are aimed at finding a way to guarantee Kosovo's viability as a separate entity without requiring Serbia to recognize the independence of a territory that it sees as the cradle of its identity.
But after 14 hours of talks on Wednesday, Serbia said a U.N. seat for Kosovo would amount to just such a recognition, while Kosovo said the issue was non-negotiable.
Both sides headed home, only for Kosovo to announce that its prime minister, former guerrilla commander Hashim Thaci, had turned back from Slovenia's Ljubljana airport at the request of EU foreign policy chief Catherine Ashton.
"Delegations back to Brussels! Dialogue to continue tomorrow!" tweeted Kosovo's EU integration minister, Vlora Citaku.
The Serbian state news agency Tanjug said Belgrade had received the invitation to return, and would respond during the day. There was no official word from Prime Minister Ivica Dacic, whose office released photos of him meeting visiting Hollywood star Kevin Costner.
Agreement would mark a seminal moment in the region's recovery from the collapse of federal Yugoslavia.
Kosovo broke away from Belgrade in 1999 after 78 days of NATO air strikes halted the killing and expulsion of ethnic Albanians by Serb forces trying to crush a guerrilla rebellion.
The province declared independence in 2008 and is recognized by more than 90 countries, including the United States and 22 of the EU's 27 members.
Dangling the prospect of membership talks, the EU says Serbia must help to end an ethnic partition of Kosovo between the 90-percent Albanian majority and a northern pocket of some 50,000 Serbs where Belgrade still has a fragile grip.
KEY TO STABILITY
The two sides have edged towards a deal on the status of the north, including what powers it would wield, through six months of talks mediated by Ashton. But negotiations on Wednesday, billed as make-or-break, stalled over Point 14 of the plan.
That calls for Serbia to stop obstructing Kosovo's accession to international organizations, implicitly the United Nations.
"Removing that point would undermine the entire agreement," Bekim Collaku, an adviser to Thaci, told Reuters. "What kind of normalization are we talking about if after this deal Serbia will continue blocking Kosovo on its Euro-Atlantic path?"
Serbia's Dacic said all was not lost, but nonetheless accused Thaci of trying to scupper the deal.
"Serbia is supposed to let Kosovo be a member of international organizations? Well then let's just write down that we recognize Kosovo as independent," he told reporters. "We couldn't accept that, and we will never accept that."
Settling their relations would go a long way to stabilizing the Western Balkans. Kosovo's ethnic partition frequently flares into violence and has frustrated NATO's plans to cut back a peace force that still numbers 6,000 soldiers.
The EU wants to anchor Serbia in accession talks, driving reform and luring investors to a country of over 7 million people. Just as it was the main agitator of the wars that tore apart Yugoslavia, Belgrade today holds the key to regional stability and development.
Ashton said the differences were "narrow and very shallow".
She is due to report back to EU governments before they make their recommendation on accession talks for Serbia on Monday. That decision would then be finalized in June.
"We have some hours left," Ashton said after Wednesday's talks. "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."
(Additional reporting by Adrian Croft in Brussels and Jaksa Scekic in Belgrade; Writing by Matt Robinson; Editing by Kevin Liffey)
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