2006 has been billed as a ?decisive year? for the states of the former Yugoslav federation that broke up in a series of brutal ethnic wars during the 1990s.  The issues concern boundaries and matters of statehood in a region, which is still struggling to overcome a divisive legacy.

According to Charles Kupchan, Director of Europe Studies at the Council on Foreign Relations in Washington,  ?The question for the diplomats today is what can be done to make sure that the Balkans have witnessed their last round of bloodshed?  What can be done to create a stable equilibrium between states that still harbor suspicions and animosities toward each other, to buy time for the magic of political and economic integration to work

Most observers agree that the thorniest issue is resolving the status of Kosovo, a subject of bitter dispute between its ethnic-Albanian majority and Serb minority.  Since NATO's 1999 air strikes, which drove Serb forces from the region, Kosovo has been an international protectorate, but is technically still a province of Serbia.  Most Albanians want independence, while most Serbs want to remain a part of Serbia. 

Many analysts note that at the end of NATO's campaign, the United States and its European allies postponed any decision regarding Kosovo's status.  Their main concern was that recognition of Kosovo?s independence would stir up Serb nationalism and reduce the chances of a democratic transformation in Serbia.

Renewed Diplomacy

Last year, Kosovo was put back on the international diplomatic agenda.  In November, Martti Artisaari, U.N. envoy and former President of Finland, visited the region in order to lay the ground for talks between the Albanians and Serbs on resolving Kosovo?s status. 

Charles Kupchan, who also teaches at the Georgetown University in Washington, says there is a general diplomatic consensus that Kosovo should gain independence. 

But he contends strong prodding is essential. ?And ultimately it may take a firm decision by the international community to push this through.  But I think it is realistic as long as the negotiating team that is lead by Martti Artisaari sees this not so much as a negotiation left to the whims of the two parties, Belgrade and Prishtina, but takes a more forceful approach and presses the parties to reach an agreement by the end of the year.? 

Professor Kupchan doubts that Belgrade will easily acquiesce, but he says the international community may try to attain Serbia?s cooperation by forgiving its sizable foreign debt and expediting discussions about its membership in NATO?s Partnership for Peace and the European Union. 

Kosovo Gaining Sovereignty

James Dobbins, Director of the International Security and Defense Policy Center at the RAND Corporation in Washington, says Kosovo Albanians will have to give some power to the Serb minority and agree to conditional independence.

He adds, ?It would be a set of arrangements, which provides guarantees for minorities and continued international oversight to ensure that those guarantees are fulfilled.  It effectively makes Kosovo look something like Bosnia, which has been an independent and sovereign country for a decade, but one that still has an international administrator and considerable limitations on its freedom of action.?

Since the signing of the Dayton Peace Agreement in 1995, Bosnia has been divided into two ethnic-based entities, a Muslim-Croat federation and a Bosnian Serb republic, held together by a weak central government and three presidents.  The NATO forces brought in to keep the peace were replaced two years ago by a much smaller European Union-led force.  And the country's most senior international official is the European Union's High Representative.

Resurrecting Bosnia

International administration has helped Bosnia gradually strengthen the role of the central government and promote faster integration. A key breakthrough was achieved late last year when an accord was reached on creating a unified multi-ethnic national police force.

Analyst James Dobbins notes that since then, Muslim, Croat and Serbian leaders have agreed to eliminate the system of three presidents and further strengthen central authority.

He says, ?They have made significant progress in effectively amending their constitution adding new arrangements, which can allow the international community to diminish its presence and permit the Bosnian leaders and institutions to assume more responsibility.  It will gradually mean that the largely theoretical sovereignty Bosnia has enjoyed for the last decade could become more real.?

Many observers contend that national leaders realize that only an efficient government can negotiate membership in the E.U. And U.S. ambassador Donald Hays, who served as U.N. Principal Deputy High Representative in Bosnia from 2001 to 2005, adds that Bosnian voters are exerting pressure on their leaders.

Ambassador Hays argues, ?The most important thing that drives these politicians to the table is the recognition that the citizens of Bosnia finally said, ?Listen, enough is enough. We want an economy that works and we want a government that functions in order to promote a more stable and a more positive environment for our children. And if you don?t deliver that, we are going to vote for somebody else.

As an indication of the progress Bosnia has made since the Dayton Peace Accords, European Union foreign ministers late last year approved talks on a Stabilization and Association Agreement, the start of Bosnia?s path toward possible E.U. membership.

Montenegro Wants Independence

In May, Montenegro is scheduled to vote on whether to break its union with Serbia.  The two former Yugoslav republics, stuck together throughout the 1990s.  They formed a union in February 2003, intended to last at least three years, after which the two republics could hold referendums on whether to separate.

When the E.U. brokered the deal, it was reluctant to redraw more borders in the region. But Brussels now concedes that the arrangement is dysfunctional. 

Most observers predict that Montenegro?s 650,000 citizens will opt for independence.  They say such an outcome, together with Kosovo gaining sovereignty, will mark the final dissolution of Cold War Yugoslavia and the beginning of the region?s reintegration with the rest of Europe based on the principles of liberal democracy and a free-market capitalism.  

This story was first broadcast on the English news program,VOA News Now. For other Focus reports click here.