The leaders of Serbia and Kosovo reached an agreement to end their dispute over licence plates, according to the European Union's top diplomat.
"We have a deal," said the EU's high representative for foreign affairs Josep Borrell in a tweet on Wednesday.
The most recent rise in tensions between the two sides is over Kosovo's plan to begin fining thousands of motorists who currently have Serb-issued licence plates.
The move angered Serbs in northern Kosovo who, like Belgrade, do not recognise Kosovo's 2008 declaration of independence from Serbia. Many people have resigned from public institutions to protest the new provision, including hundreds of police officers.
The deal announced by Borrell appeared to be similar to the agreement Serbian President Aleksandar Vučić and Kosovo Prime Minister Albin Kurti failed to reach on Monday.
Borrell said that Serbia agreed to stop issuing licence plates with Kosovo cities' denomination on them while Kosovo would "cease further actions related to re-registration of vehicles."
Kurti had previously suspended the plan to fine motorists for 48 hours due to a request by the United States.
Kosovo's President Vjosa Osmani meanwhile thanked the US in a tweet on Wednesday "for their active engagement in reaching today’s deal in Brussels."
Osmani had accused Borrell of bias over his statement singling out Kosovo for the breakdown of the deal on Monday.
Borrell had criticised the leaders on Monday for failing to reach a deal, stating that he would inform EU countries and their international partners about "the unconstructive behaviour of parties and complete lack of respect for their international legal obligations, and this goes in particular for Kosovo."
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