Serb parties agree coalition deal - state TV

BELGRADE, May 11 (Reuters) Serb Prime Minister Vojislav Kostunica and President Boris Tadic agreed on a coalition deal today, four days before the expiry of a deadline for holding new elections, state television said.

An official announcement was expected by 1730 IST.

Kostunica and Tadic's parties had been negotiating since an inconclusive Jan 21 election. The West was pushing for a deal to avoid a power vacuum as international efforts to solve the issue of independence for Serbia's Kosovo province come to a head.

A Belgrade-based diplomatic source said earlier foreign officials in Belgrade had received word of an imminent deal.

A constitutional deadline expires on May 14 and if there is no agreement by then a new election must be called.

The talks appeared stalled earlier in the week when Kostunica, a moderate nationalist, backed Radical Party deputy leader Tomislav Nikolic for the key post of parliament speaker.

The Democrats said Kostunica was trying to blackmail them into joining a coalition on his terms, and accused him of capitulating to the hardliners, seen by the West as heirs of late nationalist strongman Slobodan Milosevic.

The European Union condemned the election of Nikolic as a return to ''darker days'' and urged Kostunica and Tadic to rise above their differences for the good of the country.

Political sources added that as part of the deal between the two leaders, they would unite in parliament to replace Nikolic as parliament speaker.

They had also reached agreement on joint control of the security services. Tadic had opposed full control of the police and secret service for Kostunica's party because he has not arrested top war crimes fugitive Ratko Mladic.

The EU froze talks on closer ties with Serbia last year due to Belgrade's failure to hand over Mladic, and says he is hiding in the country under the protection of hardliners in the security services.

If a new election were to be called, the campaign would coincide with the loss of Kosovo, whose Albanian majority expects to win independence soon with Western backing.

The West fears a nationalist backlash over Kosovo could strengthen the Radicals, less than seven years after Milosevic was ousted.

Reuters SYU GC1626