The European Union has recommended that membership talks should be opened with Serbia and has given the green light for Kosovo to start talks on an association agreement with the bloc.
The European Commission -- the 27-member bloc's executive arm -- made the recommendation in two separate progress reports published on April 21.
EU Enlargement Commissioner Stefan Fuele hailed the move.
"[It is] a historic day," he told reporters. "It is also a game changer, it is a game changer for Serbia and Kosovo. It is a game changer for the whole region of the Western Balkans."
The Serbia report said Belgrade "has taken very significant steps and [made a] sustainable improvement in relations with Kosovo."
It said that "the Commission therefore recommends that negotiations for accession to the European Union should be opened with Serbia."
The report on Kosovo said that Pristina had also met all its "short-term priorities," and urged member states to authorize "the open of negotiations on a stabilization and association agreement" with the EU.
Both reports should have been issued last week, but their release was delayed to allow more EU-brokered negotiations between Belgrade and Pristina to close a deal on normalizing their relations.
After marathon talks mediated by the EU's foreign policy chief Catherine Ashton, a tentative normalization deal was finally agreed on April 19.
Ashton said she was hopeful the deal will be implemented.
"Some of the issues upon which they have had discussion have already moved into the implementation stage," she said. "I am very hopeful that with the determination we have seen, they will move to implement all of the elements of this agreement. I will support them in any way that I can and I have already offered to help and to participate in not only implementation, but if they continue their dialogue I am at their disposal. It has been a real privilege to help them."
On April 22, Ashton hailed the Commission's decision to open talks on closer ties with both sides, saying the move marks "a decisive break with the past and a common step towards a European future."
Also on April 22, Serbia's government approved the normalization deal with Kosovo unanimously. The parliament is due to discuss it later this week.
The Kosovo parliament approved the tentative deal on April 21.
The agreement allows Serbs to police and manage the north of Kosovo, which is inhabited predominantly by ethnic Serbs, in exchange for their nominal recognition of the authority of the Kosovo government.
It also calls for the two sides not to obstruct one another as they seek eventual membership in the EU.
The agreement, however, has triggered outrage among Serb nationalists. RFE/RL’s correspondent in Mitrovica in northern Kosovo reports that several thousand Serbs gathered on April 21 to protest Belgrade’s acceptance of the deal.
On April 22, Western diplomats called for the deal be put into effect immediately.
"We wish to see the agreement between Serbia and Kosovo implemented now," said German Foreign Minister Guido Westerwelle, ahead a meeting of EU foreign ministers in Luxembourg. "That is really important from our point of view."
Kosovo declared independence in 2008. Serbia has vowed never to recognize it, and Serbian officials insist that the latest agreement does not mean Belgrade has effectively recognized Kosovo's statehood.
With reporting by AP, AFP, dpa