The most senior Croatian military officers convicted of war crimes have been freed after the UN court in The Hague acquitted them on appeal.
Generals Ante Gotovina and Mladen Markac had been sentenced to 24 and 18 years, respectively, in 2011 for their roles in a 1995 military offensive to drive Serbian rebels out of Krajina, a Croatian region bordering Bosnia-Herzegovina.
A Croatian government plane carrying the two men arrived hours later in Zagreb, where they were welcomed by Croatia's prime minister and other officials.
Gotovina told a cheering crown in the city's main square that "We have won, the war is over and let's turn to the future."
Judge Theodor Meron read out the decision at a hearing of the Appeals Chamber of the International Criminal Tribunal for the former Yugoslavia (ICTY) in The Hague.
Some 200,000 ethnic Serbs were driven from Krajina and at least 150 were killed in an offensive known as Operation Storm.
UN judges in 2011 had ruled both men, who helped plan and run Operation Storm, were part of a criminal conspiracy led by the late Croatian President Franjo Tudjman to expel Serbs. But appeals judges said no such conspiracy existed.
Gotovina, who led the Croatian forces, and Markac, who was in charge of the special police troops, are considered heroes in their home country.
Thousands of people in Croatia's capital had cheered the ruling as they watched the court proceedings live on television.
Croatian Defense Minister Ante Kotromanovic said it had finally been proven that Croatia carried out the 1995 operation "honorably," but Serb President Tomislav Nikolic said the acquittal "will open old wounds."
But Serbian officials reacted angrily to the ruling.
President Tomislav Nikolic was quoted as saying the acquittal was a "political decision" that "will open old wounds." Deputy Prime Minister Rasim Ljajic said the UN court has lost "all credibility" by acquitting the two generals.
"The government expressed its bitterness over the ruling," Ljajic said. "Instead of bringing justice to victims and their families, the decision adds salt to injury. This is a slap in the face for the international justice and for the process of reconciliation."
The two had been indicted in the early 2000s by The Hague court. Markac surrendered voluntarily in 2004, while Gotovina, who had been on the run for four years, was arrested in the Canary Islands in 2005.
His arrest came as the European Union made it clear that Croatia's chances of joining the bloc depended on finding war criminals and bringing them to justice. Croatia is now set to join the 27-member bloc in July 2013.
Peter Stano, a spokesman for EU Enlargement Commissioner Stefan Fuele, acknowledged the court's decision and urged Croatia to continue on the path of reconciliation.
"We sympathize with all the victims of the war and with their families," Stano said. "And we understand that it will take time until all the wounds from this war are healed. What we need to reiterate, as well, is that we trust that Croatia will continue to look to the future in the spirit of tolerance and reconciliation, which brought this country where its stands today -- that is, on the threshold of European Union membership."
WATCH: Crowds celebrate the news in Zagreb
With reporting by AP, Reuters, and the BBC