Serbia releases three detained Kosovo policemen, easing crisis

BELGRADE (Reuters) -Serbia released three Kosovan policemen on Monday, more than a week after detaining them in a border area, easing a mounting stand-off between the neighbouring countries and former wartime foes.

The three officers, who were freed by a Serb court ruling, joked with border guards as they crossed back into Kosovo territory on Monday afternoon then drove off in a police jeep.

The European Union welcomed the move and urged Kosovo and Serbia to take further steps to defuse the simmering crisis, including holding new local elections in northern Kosovo.

Josep Borrell, the bloc's foreign policy chief, warned the EU would take "political and financial" measures against either government if it did not move towards normalising relations.

"Member states remain ready to take further measures if no progress is seen," he told reporters after a meeting of EU foreign ministers in Luxembourg.

Serbia said the policemen - identified only by their initials, B.S., R.Z. and S.M. - were detained inside Serbia on June 14. Prosecutors charged them with the unauthorised production, possession, carrying and trafficking of weapons and explosive substances.

Kosovo says Serbs kidnapped the officers inside its territory. It demanded their release, as did the European Union and the United States.

A panel in the High Court in the southwestern Serbian city of Kraljevo "confirmed the indictment against the aforementioned defendants and issued a decision terminating the defendants' detention", the court said in a statement.

The ruling effectively allowed the Serb authorities to maintain the charges while letting the three return to Kosovo, beyond the reach of the Serb court.

Albanian-majority Kosovo, formerly a southern province of Serbia, declared independence from Belgrade in 2008 with the backing of the West following a 1998-99 war. Serbia still considers Kosovo a part of its territory.

Violence flared in four northern Kosovo municipalities late last month after ethnic Albanian mayors took office following a local election. Turnout was just 3.5% after ethnic Serbs, who make up the majority of the population there, boycotted the vote.

Brussels and Washington have urged Serbia to remove protesters from the four municipalities, and called on Kosovo to withdraw police and mayors from the area, and organise snap local elections.

Kosovo's Prime Minister Albin Kurti confirmed the release of the three policemen on Monday.

"Even though we are joyous that they get to return to their families, this abduction consists of a serious human rights violation and must be reprimanded. The Serbian aggression must be held accountable," Kurti said on Twitter.

EU enlargement commissioner Oliver Varhelyi said de-escalation must continue, including the establishment of an association of Serb municipalities, as stipulated by an 2013 EU-brokered agreement between Belgrade and Pristina.

(Reporting by Aleksandar Vasovic, Fatos Bytyci in Merdare and Andrew Gray in Brussels; Editing by Toby Chopra, Andrew Heavens and Alex Richardson)