The prime ministers of the two Balkan countries said on Friday that they had struck a deal on procedures to resolve the issue.

In a joint statement, Slovenian Prime Minister Borut Pahor and his Croatian counterpart Jadranka Kosor said "the Slovenian government will propose to parliament's foreign policy and EU affairs committee that Slovenia withdraw its blocking of Croatia's EU accession negotiations."

In exchange, the Croatian premier sent a letter to the current EU presidency, Sweden, indicating that his government would make no more assumptions about the two countries' 18-year border row.

Kosor said that a "new chapter" had been opened and that "friendly relations and respect can lead to a resolution of problems." Croatia hopes to become an EU member by 2011.

Dispute has simmered since the breakup of Yugoslavia

Slovenia, the only former Yugoslav region to join the European Union, has been blocking Croatia's entry talks since last December.

The two former Yugoslav republics have been arguing over the border's demarcation in the northern Adriatic Bay of Piran since Yugoslavia fell apart in 1991. The dispute erupted into the open late last year when Croatia submitted entry bid documents to the EU making claims in its favor about where the frontier was.

Slovenia, an EU member since 2004, then moved to block further accession talks.

The two sides said that negotiations on the border would now continue with international mediation, as proposed by the European Commission earlier this year.

gb/dpa/AP/AFP/Reuters
Editor: Andreas Illmer