The leaders of Serbia and Kosovo held video talks chaired by the EU on Sunday as they seek an solution to one of Europe's most intractable territorial disputes.

EU diplomatic chief Josep Borrell called on the two sides to show "political courage" to find a way forward, saying the lack of a solution was restricting economic progress and risking instability.

Serbia has refused to recognise Kosovo's unilateral declaration of independence after the province broke away in the bloody 1998-99 war that was ended only by a NATO bombing campaign against Serb troops.

"The absence of a solution is hampering the development of the two sides," Borrell, who is chairing the talks alongside the EU's special representative for the dialogue, Miroslav Lajcak, said before the talks began.

Borrell said the aim was to "restart serious and intense work" on normalising relations between the two sides.

"These talks will require political courage from both sides, will require commitment and engagement in the spirit of compromise and pragmatism," he said.

"It has never been easy to find solutions to problems that have been so lasting and so painful but this is why we are here today -- to try again."

Kosovo's Prime Minister Avdullah Hoti and Serbian President Aleksandar Vucic will each hold talks with Borrell and Lajcak before all sides gather for a virtual round table session.

Sunday's round follows another virtual meeting held on Friday and attended by French President Emmanuel Macron and German Chancellor Angela Merkel.

- 'Beginning of the story' -

EU efforts to get the two sides to talk productively have dragged on for nearly a decade with little progress, and the most recent effort broke down about 18 months ago.

A senior Brussels official warned that significant challenges lay ahead, saying Sunday's talks marked "the beginning of the story" as the bloc tries to inject new life into the process, with all eyes now on a planned meeting in person between Vucic and Hoti in Brussels on Thursday.

"We've been talking for 10 years now without much success -- let's hope that now is the good time to make progress," the senior official said.

Both Kosovo and Serbia have been facing mounting pressure from the West to resolve the impasse which is as seen as crucial to either side joining the EU.

The new push comes after Kosovo's President Hashim Thaci was charged last month with war crimes by prosecutors in The Hague.

Thaci's indictment led to the postponement of a White House summit between Serbia and Kosovo that was due to be held at the end of June.

More than 13,000 people died in the war, mostly Kosovo Albanians, who form a majority in the former province.

Related Story