Enlargement Commissioner Olli Rehn said Serbia's talks on an EU stabilization and association agreement (SAA) would be postponed because it had failed notably to hand over former Bosnian Serb military leader Ratko Mladic.

"It is disappointing that Belgrade has been unable to locate, arrest and transfer Ratko Mladic to The Hague" tribunal, he told reporters. "The commission has therefore decided to call off the negotiations on the stabilization and association agreement. The commission is ready to resume negotiations as soon as Serbia achieves full cooperation."

The EU was due to resume on May 11 its talks with Serbia and its federal partner Montenegro on an SAA, seen as the first step to joining the 25-nation bloc.

Rehn said he made the decision after telephone talks on Serbia's cooperation earlier on Wednesday with Carla Del Ponte, the chief prosecutor of the International Criminal Tribunal for former Yugoslavia (ICTY).

"Her assessment is negative," he said.

Serbian denies knowledge of Mladic's hiding place

Mladic and Bosnian Serb wartime political leader Radovan Karadzic are wanted by the Hague-based court for genocide, war crimes and crimes against humanity. They have been at large since 1995.

The genocide charges relate to their roles in Bosnia's 1992-1995 war, notably the Srebrenica massacre of an estimated 8,000 Muslim men and boys.

Serbia has persistently denied knowledge of Mladic's whereabouts, although it recently admitted he had been under military protection until mid-2002 and was paid a pension until

December.

The prospect of joining Europe's rich club has been a powerful incentive for reform in the troubled Balkans. Macedonia was made a candidate to join the Union last year.

Serbian premier pleads for Mladic to surrender

Serbian Prime Minister Vojislav Kostunica meanwhile on Wednesday called on Mladic to give himself up to the UN war crimes tribunal for the sake of his country.

"It would be best of all for Ratko Mladic to follow the example of all other officers and go to The Hague," Kostunica said in a written statement issued after the European Commission suspended talks on closer ties with Serbia. "It has never happened in our history that the people and the state have paid the price for the mistakes of just one officer.

"By remaining in hiding, Mladic is causing serious damage to our state's national interests," he said.

Del Ponte told a press conference she was "particularly disappointed" at the failure to catch Mladic. She slammed as "unacceptable" Kostunica's appeal for Mladic to surrender, calling it "double-faced."