The EU leaders said that Serbia must move forward the European Union so that it could be included in the 27-nation bloc at a one day summit on Friday. The statement urging Belgrade to give high priority to meeting conditions for membership so "progress on the road towards the EU ... can be accelerated" was planned to be issued.
The main condition was to hand over war crimes fugitives, especially former military chief Gen. Ratko Mladic who is charged with genocide by the U.N. Yugoslav war crimes tribunal in The Hague and is said to hide in Serbia.
Britain, France, the Netherlands, Belgium were to stress Belgrade to hand over the war crime fugitives, but some other nations, particularly Italy, the statement as an offer for fast-track EU membership for Serbia but without setting a date.
Many EU leaders however, stressed the need to offer Serbia some sort of carrot to entice it to accept Kosovo independence, currently a southern province of Serbia. "We want to signal to Belgrade that we want a stable Serbia," said German Chancellor Angela Merkel.
"Serbia must have the concrete perspective of membership in the European Union," said Estonia's Prime Minister Andrus Ansip.
Before Serbia would be included in the EU is should be "fully integrated into the family of European nations, "the summit draft declaration stressed, saying it is "important for the stability of the region."
The main issue was Kosovo and the ways of preventing of the unrest that could spark if the province declares independence.
"We will have to provide the western Balkans, including Serbia, a clear European perspective," said Danish Prime Minister Anders Fogh Rasmussen.
EU leaders are expected to declare that the status quo in Kosovo "is unsustainable," according to the draft. It urges the United Nations, Serbian and Kosovar leaders to find a solution and refrain from violence.
Memories of deep divisions over the Balkan wars in the 1990s - which led to the union's inability to prevent the fighting - still haunts EU capitals.
But the union remains divided over whether to recognize Kosovo's independence, putting at risk an administrative takeover of Kosovo from the United Nations, a mission that needs the backing of all 27 EU states.
Cyprus is against of Kosovar sovereignty and of sending an 1,800-member EU police and security mission to the province.
The nation is sharing an island with a Turkish community that broke away in the 1970s. But neither the international community nor Cyprus recognize the independence of the Turkish Cypriot area.
Nicosia is demanding that Belgrade and Pristina continue negotiations to find a U.N.-backed solution to the crisis. A U.N. deadline on internationally mediated negotiations over Kosovo's status passed Monday, and other EU nations no longer support negotiations.
Spain, Slovakia, Greece and Romania have also expressed fears that independence for Kosovo would encourage separatist movements elsewhere. But they were expected to back an EU mission in Kosovo.
Belgian Foreign Minister Karel De Gucht said he hoped the summit would "take a step toward launching a European mission in Kosovo."
The EU leaders debate on Kosovo comes before a key U.N. Security Council meeting on the province's status Dec. 19.
They were discussing a paper drafted by Britain, France, Italy, Germany and the United States on how the EU could recognize Kosovo after it declares independence, diplomats said.
Under the plan, according to diplomats who have seen it, EU powers like Germany, France, Italy and Britain would recognize Kosovo days after its declaration of independence, followed by other EU nations. The U.S. and others would follow suit after that.
Ethnic Albanians, who comprise 90 percent of Kosovo's 2 million people, insist on independence. Serbia, backed by Russia, insists the province must remain Serbian territory.
Ethnic Albanians expect swift recognition of independence from the EU and others. But Serbs have threatened to leave or to group in Kosovo's north, where most of them live, and call for the territory to unite with Serbia.
Friday's summit will also focus on globalization. European Union economies are under pressure to reform so they can compete with economies in Asia. EU leaders will be asked to agree to drafting a common immigration policy by 2010, which is meant to lure highly skilled migrants while keeping out illegal asylum seekers.
They will also discuss creating a panel to debate the future direction of the union, an idea pushed by French President Nicolas Sarkozy.