By Aleksandar Vasovic and Alexei Anishchuk
BELGRADE (Reuters) - Russian President Vladimir Putin is guest of honour at a military parade in Belgrade on Thursday to mark 70 years since the city's liberation by the Red Army, a visit loaded with symbolism as Serbia walks a tightrope between the Europe it wants to join and a big-power ally it cannot leave behind.
The United States and European Union are unlikely to welcome the sight of Putin taking the salute at a parade of more than 3,000 Serbian soldiers while NATO says Russian troops are fighting on the side of separatist rebels in eastern Ukraine.
The East-West split over Ukraine, recalling the Cold War, has exposed the balancing act Serbia faces, politically indebted to Russia for helping to keep the breakaway region of Kosovo out of the United Nations but seeing its economic future in the EU.
Though U.S. Ambassador Michael Kirby was invited to the parade, the United States embassy said he would not attend.
Serbian Prime Minister Aleksandar Vucic, however, said he had spoken by phone with U.S. Vice President Joe Biden on Wednesday evening, noting the "significant improvement" in ties between the two countries, 15 years after Washington led a NATO air war to halt Serbian atrocities in Kosovo.
The parade is Serbia's first in almost 30 years, commemorating how the Soviet army and Communist Yugoslav partisans drove Nazi German forces from the city. It will give Putin the chance to demonstrate the influence and reverence Russia still commands in parts of the Balkans, be it through gas supplies or notions of Slav brotherhood rooted in history, shared Orthodox Christianity and common conservative values.
The military pomp will also play well for Putin at home, where the Russian economy has taken a hit from sanctions imposed by the West over Ukraine.
For Serbia, the threat of Russia's United Nations veto is the only thing standing in the way of its former Kosovo province joining the world body - a red line for Belgrade six years after the majority-Albanian territory declared independence with the support of the West.
That has put Serbia in an awkward spot, refusing to sign up to the Western sanctions despite EU pressure to align its foreign policy with the 28-nation bloc which it is negotiating to join. Belgrade still has time, however, with EU accession unlikely before 2020 at the earliest.
"Serbia will not compromise its morals with any kind of bad behaviour towards Russia," Serbian President Tomislav Nikolic told Putin after the leaders laid wreaths at a memorial to fallen Soviet soldiers in Belgrade.
Some 31,000 Soviet soldiers died in the liberation of the city. Nikolic presented Putin with the Order of the Republic of Serbia, the country's highest state decoration.
"Russia, just as it was in the past, will always see Serbia as our closest ally," Putin said.
In a gesture branded obsequious by critics, Serbia has brought forward the main event of this year's anniversary by four days, to accommodate Putin as he heads to an EU-Asia summit in Milan.
Soviet forces and their partisan allies were still fighting their way into Belgrade 70 years ago on Thursday. The Nazis abandoned the city on Oct. 20, 1944, retreating across the River Sava.
"Russia is our mother, and with or without Liberation Day, the Russian president deserves a parade," said 56-year-old carpenter Milorad Lazic.
Many younger Serbs, however, feel little affection for Russia. "It's such a shame they moved Liberation Day four days, and this rain is divine punishment," said Aleksandra Pasic, 29, a clerk. "This government demonstrates such servility towards Russia, which is our ally only when it suits it."
Yugoslavia under Tito quickly split with Stalin, balancing itself between Cold War foes for the next four decades.
Under late strongman Slobodan Milosevic in the 1990s, Serbia aligned itself with Russia as Yugoslavia collapsed in war. Since Milosevic's overthrow in 2000, Serbs have gradually turned west, and the EU has outstripped Russia to become Serbia's biggest trade partner, donor and source of investment.
Serbia has softened its stance on Kosovo in return for the start of EU accession talks, and is seen increasingly by the West as a stabilising factor in the region having exported war for a decade under Milosevic to Bosnia, Croatia and Kosovo.
That said, Serbia, like much of Eastern Europe, depends on Russia for gas. It also wants to woo Russian orders for its agricultural produce and Russian investors to a host of run-down state enterprises, as well as expand a free trade agreement.
Russia's South Stream gas pipeline, which is due to pass through Serbia, will also come up; Belgrade promised to start construction in July, but has quietly held off due to EU legal objections rooted in the Ukraine crisis.
Putin will give a speech at the parade, which will involve tanks, boats and a fly-past including a Russian aerobatic team. Despite the red-carpet treatment, Vucic said last week that Putin would "hear that Serbia is on the European path".
(Additional reporting by Alexei Anishchuk in Moscow and Ivana Sekularac in Belgrade; Writing by Matt Robinson; editing by Anna Willard and Giles Elgood)