Kosovo, the United Nations-administered south Serbian province, is slowly moving closer to final status negotiations. Analysts in the 90 percent Albanian-populated territory believe status talks are likely to begin in October.

Norwegian envoy Kai Eide is preparing a report reviewing developments in Kosovo and assessing the territory's implementation of standards of good governance. Analysts say that document, expected to be ready in September, is likely to conclude that the time has come for the United Nations to resolve Kosovo's final status.

The landlocked territory of two million inhabitants has been under U.N. control since 1999, when sustained NATO bombing in support of ethnic Albanians drove Serb troops out of Kosovo. NATO-led peacekeepers are posted throughout Kosovo.

Alex Anderson, the Pristina representative of the non-government International Crisis Group, says the final status negotiations, once they begin, will be exceedingly difficult. It will, he says, be a huge challenge to craft an agreement acceptable to both ethnic Albanians and the Serbian government.

"I don't think there is any good solution for Kosovo," he said. "It is such a contested territory that whatever solution is found is not going to leave everybody happy."

Mr. Anderson believes what is likely to emerge, perhaps within 12 months, is a plan for a kind of conditional independence.

Enver Hoxhaj, a member of the Kosovo parliament and a philosophy professor at Pristina University, believes a solid timetable for concluding the final status negotiations is needed. Mr. Hoxhaj rejects the idea that Serbia needs to agree on Kosovo's final status.

"I don't think that Belgrade [Serbia] should be asked concerning the final status issue," he said. "Belgrade has the right, actually, to be interested in the position of the Kosovo Serbs here, regarding the position of the [Orthodox church] religious sites. And I think everybody has an understanding for that. But regarding the status issue, Belgrade simply doesn't have the legitimacy."

Other analysts say to assure regional stability, it is essential that a Kosovo settlement be acceptable to Serbia. Kosovo Albanians want nothing less than independence, an outcome opposed by Serbia.

Kosovo's Serbs, who comprise well under ten-percent of the population, were targets for ethnic Albanian rioting 16 months ago. Mr. Anderson believes renewed ethnic violence would set back final status negotiations.

"I think it is widely understood that another collapse into violence like we saw in March of last year would be rather disastrous in terms of the international community's judgment on Kosovo," he said.

By almost all accounts there has been progress in Kosovo over the past year. Ethnic relations have improved. There is increased tolerance of minorities. More powers have been handed over to local authorities. However, the economy remains weak with unemployment approaching 50 percent of the work force.

Once the United Nations determines that final status talks can begin, a senior European Union diplomat, assisted by an American, is expected to guide the negotiations.