Serbia and Kosovo raised hopes of a breakthrough deal after hours of talks between their premier Wednesday as the EU made a final push to normalize ties and turn a page on the continent's last trouble-spot.

European Union foreign policy Chief Catherine Ashton called surprise talks in Brussels between Serbian Prime Minister Ivica Dacic and Kosovo counterpart Hashim Thaci that kicked off in the morning just two weeks after an EU-brokered dialogue between the Balkans pair broke down despite two years of efforts.

Hours later meetings were continuing late into the night with Serbian media reporting prgress. "We got a much more convenient offer than the last time," Marko Djuric, advisor to Serb President Tomislav Nikolic told journalists in Brussels.

Ashton's office said in a statement that "the dialogue will continue at 10 pm (20 GMT)."

Because of EU red tape, an agreement to ease tensions between the pair is necessary within the coming days if Belgrade is to get the endorsement of a June EU summit to open much hoped-for negotiations to become a member of the bloc.

A report prepared for the summit on the progress achieved by the fractious neighbors in advancing towards European goals and values was to have been released Tuesday but was delayed to give the 11th-hour Wednesday face-to-face a chance.

A refusal by Serbia to strike a deal could indefinitely delay its integration into the EU.

Pristina, which unilaterally declared independence from Belgrade in 2008, is for its part eyeing an association pact with the EU as a reward for normalizing ties.

Five EU countries -- Cyprus, Greece, Romania, Slovakia and Spain -- like Belgrade refuse to recognize Kosovo's independence, now recognized by some 100 nations, including the United States.

Blaming Belgrade for the lack of progress, Germany this week said that failing a breakthrough it will vote against launching EU entry talks with Serbia at the June summit -- but back the signature of a new EU pact with Kosovo.

"When one country delivers results and another doesn't, the one that is taking steps... that is doing its homework must not be held responsible for the lack of good will by the other," German Foreign Minister Guido Westerwelle said Tuesday.

"An agreement on starting negotiations on Serbia joining the EU, which it would like to see this summer, will be significantly delayed if it does not reach a deal with Kosovo," Westerwelle added.

The sudden announcement Tuesday of a fresh round in two years of Brussels-sponsored talks sparked hopes a deal was in sight, though some remained skeptical of agreement over the fate of 40,000 ethnic Serbs living in north Kosovo who refuse to recognize Pristina's 2008 declaration of independence.

"They've agreed to everything from hunting licenses to lamp-posts so far but can't agree on the north," said a Western diplomat speaking on condition of anonymity, referring to continuing disagreement over the fate of the Kosovo Serbs.

Serbia wants Kosovo to agree to decentralized Serb "municipalities" in the northern enclave with own police and courts, the bottom line being guarantees that ethnic Serbs get fair representation in Kosovo.

Pristina however sees Belgrade meddling in Kosovo affairs through the Serb community and refuses to relinquish authority over the north.

Serbian media said Wednesday that the EU was offering a compromise in which the northern Serbs would be guaranteed a fair share of regional and local police chiefs as well as the presidency of a regional court.

In Belgrade, state TV RTS said NATO would be in charge of supervising security and that Belgrade appeared largely satisfied with the new offers.

That contrasted with a last round of talks earlier this month which finished with both sides separated by what Ashton described as a "very narrow but deep" gap.

"I have asked them to come in a constructive spirit, ready to explore different options and agree to a mutual compromise," Ashton said Tuesday. (AFP)