Kosovo and Serbia officials made progress toward thawing economic relations in talks Thursday at the White House, officials said, but Serbia said it rejected an effort to force it to officially recognize its bitter enemy.
Kosovo Prime Minister Avdullah Hoti and Serbian President Aleksandar Vucic met with senior White House officials including Ivanka Trump, President Donald Trump's daughter, as US officials urged a deal on opening up economic and transport ties.
"They made real progress today," White House National Security Advisor Robert O'Brien said in a tweet.
"Economic normalization means jobs for young people. Talks continue tomorrow," he said.
Hoti called the meeting "historical" and said they had made "great progress" on improving economic cooperation.
"We now had a meeting with the President of Serbia and councillor O'Brien. Tomorrow we are waiting to finalize all this commitment," he told Kosovo media at the White House.
But Vucic said the talks were marred by Kosovo's effort to force Serbia to recognize the independence of its former territory.
"It contained an article about recognition," he said to reporters.
"We thought it should not be in a document about economic normalization, that we couldn't accept it. People from the Trump cabinet listened what we had to say, they were fair and I believe that in other documents that article is no longer there."
In the two days of talks brokered by Trump special advisor Richard Grenell, Washington hopes the two sides can finalize proposals to open up road, rail and air links, which Grenell says could boost the economies of both sides.
But the two remain bitter over a bloody war fought two decades ago, in which 13,000 died.
Kosovo, which broke away and declared its independence in 2008 with broad international support, wants Serbia to recognize it as a separate independent nation.
- Years of talks -
Brussels has led negotiations between the two sides for nearly a decade, seeking to normalize the relationship.
Grenell, formerly Trump's ambassador to Germany, thought he could broker a less ambitious deal that would help businesses.
"We're kind of stuck on political discussions and we keep pounding the same issues over and over without much progress," a Trump advisor said earlier this week.
"We do believe that a concentration on the economic development side would produce progress," the advisor said, on grounds of anonymity.
Both sides appeared to enter the talks with expectations of a deal to allow flights and trains between them.
"Our expectations are extremely positive," Hoti said earlier.
"I believe that today's agreement that can be reached on economic cooperation is a step closer to the final normalization of relations with Serbia, and mutual recognition itself."
"We want peace, we want stability, we want the progress of Belgrade, Pristina and our entire region," Vucic said in a statement posted online.
But Vucic told reporters at the White House Thursday afternoon that Kosovo had placed mutual recognition on the table as one of 16 points to discuss.
"There should be no fear that I will sign any document containing recognition of Kosovo. Period," he said.