This week he expressed confidence on both fronts.
In his latest briefing to the UN Security Council, Jessen-Petersen cited the absence of ethnically motivated attacks and "tangible progress" in implementing reforms, such as establishing democratic institutions, minority rights, and an impartial legal system.
His comments followed a UN report warning of a widening ethnic gulf between Albanians and Serbs in Kosovo and prevalent security fears among minorities.
In an interview with a small group of reporters after his council briefing, Jessen-Petersen acknowledged tough work lies ahead for Kosovo leaders to improve the conditions of Serbs, a minority population in the province. But he insisted the new provisional government -- led by Prime Minister Ramush Haradinaj -- has proven to be serious about quickly implementing the standards process.
"The Kosovo Albanians are evidently very keen to move into status talks but the message from me, from the Contact Group and the Security Council is very clear, that the way into status talks goes through a set of priority standards linked to minorities. Why am I confident? It's because it's clearly understood what is required. Therefore, there is now an understanding; there is a will," Jessen-Petersen said.
Kosovo's 90 percent ethnic Albanian majority seeks independence, while the Serbian government says the province now under UN administration must remain part of Serbia. Jessen-Petersen has rejected any calls for partition of Kosovo.
Jessen-Petersen believes there is a good chance status talks can begin in the second half of this year. In addition to providing a timeline for political leaders, he says, the process is also vital to boost the province's stagnating economy.
Unemployment is around 70 percent. Aside from some short-term projects, he said, the economic picture is bleak without a resolution of the status issue. "There is no doubt whatsoever that to see a real significant, dramatic change and improvement does require certainty on status," he said. "There's no way that you're going to get any kind of significant investment into Kosovo as long as an investor doesn't know what they are investing in. The privatizations have been encouraging but not the kind of figures that would make any difference, that would make any dent into the unemployment."
In advance of status talks, he has been given authority to transfer some authorities to local officials. He said it was a sensitive two-stage process including transfer of competencies from the UN mission to the provisional government. Officials in Pristina would then transfer power to local municipalities, where many lagging problems on minority rights can be better addressed.
The provisional government has agreed to transfer power to five municipalities in a range of areas, which Jessen-Petersen hopes will boost the process of integration. The initial focus will be on policing, he said.
"We are now in the process of finalizing a plan of action for transferring a lot of competencies in the area of police and justice and as soon as that has been done then we can consider also how we give the municipals -- the local self-government -- those competencies," Jessen-Petersen said.
The UN envoy's address to the Security Council yesterday drew a sharp response from Nebojsa Covic, the Serbian official in charge of coordinating affairs in Kosovo. Covic listed 17 areas where progress has been poor, including what he called a "lack of elementary security for Serbs and other non-Albanians."
Jessen-Petersen called Covic's statements "out of touch with reality." In his interview with reporters, he said Serbian leaders, until recently, "have been living in their own world" in regard to developments in Kosovo.
"I am not saying that Mr. Covic or Belgrade doesn't have a right to be critical or worried. There are reasons," Jessen-Petersen said. "But what I do object to is you go through a litany of issues that have been raised so many times and you ignore the facts on the ground and I used security as one example. How can you talk about insecurity, lots of incidents, when the facts are that there hasn't been one single [ethnic incident] since June?"
But he said the international community must be careful in how it engages Belgrade at this time. In addition to Kosovo, he noted that the government is grappling with issues such as cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY) and managing the union with Montenegro.
"We have to be careful because right now Belgrade evidently is under pressure form the ICTY, Belgrade is under pressure on this Kosovo issue, Belgrade is also under pressure on the Montenegro [issue]. One has to be extremely careful, I mean there is a limit," Jessen-Petersen said.
Kosovo leaders are also balancing various pressures internally. There is deep concern about the response of ethnic Albanians if the ICTY decides to indict Prime Minister Haradinaj for his actions when he was a Kosovo Liberation Army commander.
Jessen-Petersen said he hopes the international tribunal process will not derail the political process. "I would certainly both hope and expect that if the situation [of an indictment] arises in Kosovo, that Kosovo and the individual will show the right example in cooperating with the tribunal," he said.
Jessen-Petersen is scheduled to give his next assessment of Kosovo's progress in May. If positive, he would then need Security Council approval to do a comprehensive evaluation of Kosovo's standards, set for early summer. That evaluation could lead to approval to begin final-status talks for the province six years after it became an international protectorate.