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BELGRADE (Reuters) - Serbia's foreign minister and a top ally of President Aleksandar Vucic has suggested a compromise to end a conflict over Kosovo, the newest independent European state, that is blocking Serbia's hopes of European Union membership.

Serbia, where many regard Kosovo as the cradle of their nation and Orthodox Christian faith, refuses to recognise the independence of its former Southern province and has been blocking its membership in organisations including Interpol and UNESCO.

But normalisation of relations with Pristina is a key condition for Serbia to come closer to membership in the European Union, which the government has set as its priority.

In an op-ed piece published by the Vecernje Novosti daily on Monday, Ivica Dacic suggested that delimitation between Serbs and Albanians, the largest ethnic group in Kosovo, would be a way out of what he described as Serbia's centennial problem.

"Everyone needs a lasting solution of the Serbian-Albanian conflict which can be reached only through an agreement ... where everyone will win something and lose something," wrote Dacic, who is also First Deputy Prime Minister.

Dacic said Serbia should seek autonomy for Serb enclaves in Kosovo, a protected status for Orthodox monasteries and financial compensation for what Serbia claims as its property including industrial and energy facilities.

There was no immediate reaction from Pristina. Most Kosovo Albanians oppose greater autonomy for Serb-dominated municipalities, saying that would allow Belgrade to exert greater influence.

Dacic's comments echoed a call for a nationwide dialogue over Kosovo suggested by Vucic, who is leading the Serbian team in EU-led talks to resolve differences between the two countries.

Kosovo seceded from Serbia in 2008, almost a decade after NATO intervened with air strikes to drive out Serbian forces and halt the killing and expulsion of ethnic Albanian civilians during a two-year counter-insurgency war.

Currently there are around 120,000 Serbs in Kosovo and most of them, mainly in the north, oppose the Pristina authorities.

Serbia has so far avoided formal proposals for the carve-up of Kosovo as the move would mean abandoning its title to the whole territory, which it insists on under its constitution.

Kosovo has been recognised by 115 countries, including 23 out of 28 EU members, but its UN membership is being blocked by Serbia's allies Russia and China.

(Reporting by Aleksandar Vasovic; Editing by Alister Doyle)

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