Serbia appeared to move closer to setting up a government of nationalists and socialists today after an inconclusive general election.
"We have agreed today on the principles for the formation of a joint government and discussions will continue on a coalition agreement," said Ivica Dacic, leader of the Socialist Party, once headed by the late autocrat, Slobodan Milosevic.
Mr Dacic made the statement after talks with the nationalist Radical Party and the DSS-NS bloc of outgoing nationalist Prime Minister Vojislav Kostunica.
The country has been balanced on a political see-saw between hardliners and pro-European liberals since Sunday's ballot, which gave neither side a clear majority.
The coalition that emerges will decide if Serbia will pursue EU membership or shelve its bid until the EU revokes its recognition of the independence of Kosovo, whose large Albanian majority declared statehood three months ago with EU backing.
Serb President Boris Tadic said earlier that a nationalist-socialist pact would be "a short trip on the Titanic", and said he felt bound to oppose it because it would halt Serbia's progress.
Earlier, reports said that nationalists and Socialists had clinched a deal on who would be mayor of Belgrade -- seen as a sure sign of a coalition pact.