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Serbia and Kosovo failed to reach an agreement over the fate of the Serb-dominated north of Kosovo at talks on March 20, but EU foreign policy chief Catherine Ashton said she hopes a new round of talks next month will seal a deal.

The two sides are seen closer than ever on reaching a resolution of the decade-long dispute they have been stuck in since the predominantly ethnic-Albanian province was freed from Belgrade's rule with Nato's help. That saw Kosovo unilaterally declare independence in 2008.

The EU has made improvement in relations a condition of starting EU accession talks with Serbia, but a big stumbling block is what to do with the enclave of Serbs in northern Kosovo, who object to rule from Pristina.

After hosting the latest round of talks in Brussels between Serbian Prime Minister Ivica Dacic and Kosovo Prime Minister Hashim Thaci, Ashton said that the talks would resume early next month. "We will, I hope, reach conclusions on April 2," she said at a late-night news conference, Reuters reported.

The clock is ticking towards a mid-April progress report by Ashton that will decide whether the EU launches membership talks with Serbia in June. While Belgrade says it will never recognise its former southern province as a sovereign state, the EU has softened its stance recently, and says it only wants to see an improvement in ties that, at the very least, will include the status of the small Serb pocket of northern Kosovo, where Kosovo's government has very little presence.