Germany tells Serbia to give up northern Kosovo

"If Serbia wants to achieve [EU] candidate status it should resume the dialogue [with Kosovo] and achieve results in that dialogue, enable [EU police mission] Eulex to work in all regions of Kosovo and abolish parallel structures and not create new ones," she said.

"The summer was not so great and it led to events that we believed were in the past."

Serbia has de facto control of an ethnic-Serb-dominated enclave in northern Kosovo which runs its own mini-government, refuses to let in Eulex and is said to receive money and weapons from Serbian nationalist groups.

An ethnic-Serb gunman last month killed an ethnic-Albanian policeman in the region after Kosovo special forces seized control of customs checkpoints. Serbia had earlier walked away from an EU-sponsored dialogue on day-to-day issues such as land registries and trade.

Tadic on Tuesday warned Merkel not to go too far.

"I think a policy that would confront Serbia with the choice of Kosovo or the EU is wrong," he told the press conference.

"For us it's unacceptable to reward [Kosovo] with the establishment of a new reality on the ground achieved by unilateral actions," he added on Germany's apparent endorsement of Kosovo's special forces operation.

Tadic noted that ethnic tensions in the region remain dangerous enough to "bring a new conflict" to Europe. "We expect Germany, Chancellor Angela Merkel, to have an understanding in the future for the complexity of that issue in the Western Balkans," he said.

Merkel's demands make the pro-EU president look weak ahead of elections next year. His authorities in June already handed over a top war crimes fugitive - seen as a hero by some nationalists - to The Hague in order to curry favour with Brussels.

Kosovo split from Serbia in 1999 and declared independence in 2008.

It has been recognised by 22 EU countries, including Germany. Cyprus, Greece, Romania, Slovakia and Spain do not recognise it but co-operate on practical issues such as international travel by Kosovo passport holders.