KEY POINTS:
After years of dormancy, the problem of Kosovo has surged anew, reviving memories of bloody ethnic clashes and centuries-old rivalries in Europe's powder-keg, the Balkans.
Kosovo, a predominantly ethnic Albanian province of Serbia, has been under United Nations administration since a Nato air offensive forced out Serbian troops
in 1999 to end a campaign of ethnic cleansing. Since then, Kosovo has itself been virtually "balkanised," with Serbs running their own areas and the Kosovars running theirs.
Two years of efforts to determine Kosovo's long-term future have run into the sand. Prospects are growing that Kosovar Albanian leaders will soon declare independence, a move that Serbia has darkly warned it will never accept.
A key deadline falls on December 10, when envoys from the European Union, the United States and Russia have to report to UN chief Ban Ki Moon on their attempts to mediate a deal. The issue will then be debated by the UN Security Council on December 19.
Failing an unlikely last-minute breakthrough, Kosovo's recently elected provisional assembly may rush to declare independence, according to some sources.
Their leaders, under intense pressure from their European and US allies not to unleash a crisis, are coy about the timing.
Around 90 per cent of Kosovo's population are ethnic Albanians, who have seen all the other territories of the former Yugoslavia slip away from Belgrade's control and are becoming increasingly restive about making their own break.
With an economy surviving on the black market and aid, Kosovo is a byword for backwardness and thuggery and cannot lure any investment until its future is settled.
But Serbia says it will never accept the loss of a province that is the cradle of its culture and accounts for more than a seventh of its territory.
"Unilateral moves will prompt a response. This will not lead us to peace," Serbian President Boris Tadic warned last week, a day after talks between Kosovar and Serb leaders in the Austrian town of Baden collapsed.
"We are going to annul all these decisions that would bring Kosovo to independence. We are going to use all legal and diplomatic measures to fight any such independence," said Tadic, adding, however, "Serbia does not want war."
European experts rule out any risk of a Serbian military assault to grab Kosovo, given the massive peacekeeping presence there and Serbia's traumatic memories of its defeat in 1999.
But a scenario that is taken very seriously is unrest, should the Serb-dominated northern part of Kosovo declare its secession from the new state and attach itself to Serbia. This could have a domino effect, prompting similar moves by Serbs in Bosnia-Herzegovina and by Albanians in Macedonia, who want to team up with Albania.
"The implosion would destabilise neighbouring countries, increasing pressure for further fractures along ethnic lines," the International Crisis Group think-tank said in August.
About 17,000 Nato troops - more than twice the number deployed in Afghanistan - are in Kosovo as part of the international peace force Kfor. Germany has just committed 500 more troops, and the US last week deployed 90 more to reinforce 2800 peacekeepers in the north.
In Bosnia, the EU force has shelved plans to cut its force of 2500 and its commander has spoken of a small risk of "localised ethnic clashes".
Movement towards independence sets the EU, and the US, which support Kosovo, on a collision course with Russia, the Serbs' only ally. Russian President Vladimir Putin is muscled-up with a surge in revenue from oil and expectations of a massive victory in today's parliamentary elections.
Fearing that Kosovo independence will fuel breakaway groups in the Russian Caucasus, he is threatening to veto any attempt to recast Resolution 1244 - the 1999 determination by the UN Security Council that placed the province under UN administration while recognising Serbia's sovereignty over it.
The option favoured by Brussels and Washington is "supervised independence" in which Kosovo's independence would be recognised by its allies. It would then be placed under EU tutelage.
There would not be a new Security Council resolution to support this - to do so would risk a Russian veto.
The operation will be an unprecedented tightrope act, requiring the EU to face down the Russians, to ensure Kosovo protects its Serb minority and respects the rule of law, and to dangle the carrot of EU membership so that Serbia relinquishes its claim over the province and faces its dark past.
* THEATRE OF NATO'S FIRST 'HUMANITARIAN WAR'
Kosovo has been an ethnic crossroads for millennia in the heart of the Balkans and the cause of Nato's first "humanitarian war" in 1999.
HISTORY
Kosovo, a southern province of Serbia, was first inhabited by Illyrian and Thracian tribes, ruled by the Romans then populated by Slavs in the 6th century. It became part of the Kingdom of Serbia in the early 13th century, with a population of Serbs, Albanians and Vlachs. The Nemanjic dynasty made it Serbia's spiritual heartland, giving lands to the Orthodox Church and building monasteries that stand today.
ETHNIC MAKEUP
Serbs were a majority until they were defeated by the Ottoman Empire at the 1389 Battle of Kosovo. Over the next 500 years many left while the Albanians, converts to Islam, grew in number. Mutual expulsions and migration from Albania in the early 20th century changed Kosovo's makeup. Today, two million Albanians form 90 per cent of the population. Some 100,000 Serbs remain in Kosovo, many in scattered enclaves protected by Nato.
POLITICS & ECONOMY
Landlocked and poor apart from mineral deposits, Kosovo was an autonomous region of the Socialist Yugoslav Federation and had effective self-government in 1974. Ethnic tensions escalated in the 1980s as Yugoslavia began to crumble and economic conditions deteriorated. Slobodan Milosevic used Serb nationalism as a springboard to power in 1989, restricting Albanian rights in education and local government. Strikes, protests and violence led to Belgrade declaring a state of emergency in 1990, sending in the Yugoslav Army and police.
WAR
Albanians have officially demanded independence since renegade elections in 1992 made pacifist leader Ibrahim Rugova president of a self-declared republic. The demand was ignored and support shifted to armed struggle by the Kosovo Liberation Army, a guerrilla force. Serb forces hit back so hard in 1998 that 100,000 Albanians fled to the hills and Nato powers warned Milosevic they would not tolerate "ethnic cleansing" in the Balkans. Peace talks in France failed and in March 1999 Nato started bombing to force Serbia to withdraw.
LIMBO
Kosovo, has been administered by the United Nations with Nato peacekeeping since June 1999. Kosovo's uncertain future status virtually precludes outside investment. Spasms of ethnic violence, mostly by Albanians against Serbs, together with criminal gangs trafficking in contraband and people, have tarnished its image. Albanian leaders say only independence from Serbia can cure these ills.
- REUTERS
