EU foreign policy and security chief Josep Borrell said late on Saturday that Kosovo and Serbia had reached consensus on implementing an EU-backed deal to normalize relations after 12 hours of talks, describing the negotiations as difficult.

"Kosovo and Serbia have agreed to implement an annex to the agreement on the path to normalizing relations between them," he told reporters after meeting with the leadership of the two countries in the northern North Macedonian town of Ohrid.

Borrell also touched on the issue of the proposed federation of Serbian municipalities in Kosovo, which would give greater autonomy to Serb-majority municipalities, a long-disputed topic.

"Kosovo has agreed to proceed immediately. And when I say right away I mean right away. in negotiations with the European Union facilitating dialogue on a specific arrangement and safeguards to ensure an adequate level of self-administration for Serb communities in Kosovo."

Serbian President Aleksandar Vucic said Kosovo and Serbia had reached a "kind of agreement" on the implementation of a Western-backed deal to normalize relations.

Vucic told reporters in Ohrid: "We agreed on some points. Not all the points. This is not a final agreement."

He said that despite differences on some issues, the talks with Kosovo Prime Minister Albin Kurti had been "nice". He said Serbia's path towards EU membership would be conditional on the implementation of the agreement.

North Macedonia yesterday hosted the leaders of Kosovo and Serbia for these tough new talks on normalizing bilateral relations under the auspices of the European Union, which has recently increased pressure on both sides.

The meeting on the shores of Lake Ohrid in the southwest of the small Balkan state came after talks in Brussels failed last month, where a European peace plan was unveiled.

Once again, the European official sought to bring the positions of Kosovo Prime Minister Albin Kurti and Serbian President Aleksandar Vucic closer together.

The two sides met separately with Borrell and European envoy Miroslav Lajčák before a trilateral afternoon meeting.

Kurti said upon his arrival in Ohrid: "I am optimistic, I will do my best for the Republic of Kosovo."

This 11-article European document states that the parties "mutually recognize their respective national documents and symbols" and that they will not use violence to resolve their differences.

The document also states that "Serbia will not oppose Kosovo's accession to an international organization." It also proposes granting an "appropriate level of autonomy" to Kosovo's Serb minority.

Serbia has long refused to recognize Kosovo's unilateral declaration of independence in 2008, with sporadic unrest between Belgrade and its former separatist province.

Albanian-majority Kosovo declared independence in 2008, nearly 10 years after the war that ended Serbian rule, but Serbia still considers Kosovo a separate province and, with the support of Russia and China, prevents neighbouring Pristina from becoming a member of a range of international institutions, including the United Nations.

The talks follow intensified diplomatic efforts aimed at reviving hopes of resolving tensions between Belgrade and Pristina, which continue after nearly 25 years of bloody war that ended with a NATO-led military campaign to protect Kosovo Albanians.