Serbian barricades near the border with Kosovo will be dismantled in the coming days, Serbia's President Aleksandar Vucic said, after an alarming increase in tension in the Balkans.
A UN envoy welcomed signs of de-escalation as Kosovo said a key border crossing had been re-opened.
World powers appealed for calm during weeks of unrest, in which the two sides accused each other of stirring up ethnic tensions left unresolved by the Yugoslav wars.
Mr Vucic said the roadblocks set up as a protest by the Serb minority in Kosovo would "be removed, but the mistrust remains".
"It is a long process and it will take a while," he said after meeting a group of ethnic Serbs.
Tension between Serbia and Kosovo - in pictures
The UN special representative, Caroline Ziadeh, said she welcomed all efforts to defuse tensions, including the removal of barricades.
She urged Serbia and Kosovo to return to dialogue to "address outstanding issues and normalise relations without delay", her office said.
The EU's top diplomat Josep Borrell struck an optimistic tone on Thursday, saying that "diplomacy prevailed".
"We now need urgent progress in the dialogue," he said.
Serbia had readied troops and said it would take "all measures" to protect Serbs, while Kosovo said it would defend itself “forcefully and decisively” if provoked.
The US and its European allies stepped in this week to urge dialogue, while Russia’s moves are being closely watched as it sides with its ally Serbia.
Why are Serbia and Kosovo at odds?
Kosovo declared independence from Serbia in 2008, but its statehood is not recognised by Serbia.
Before then, it was a southern province where conflict broke out in 1998 during the Yugoslav wars.
Serbian-led troops withdrew in 1999 after a 78-day Nato bombing campaign intended to protect Kosovo’s Albanian majority from ethnic cleansing, but which still rankles in Serbia.
Today, many ethnic Serbs live in Kosovo, and the government in Serbia often speaks out in the name of “its people” there.
The region has a symbolic importance for Serb identity as the location of the 1389 Battle of Kosovo, a defiant struggle against Ottoman invaders.
Why have tensions risen in recent weeks?
A dispute about vehicle licence plates, of all things, helped to trigger the latest unrest.
A Kosovan move to purge Serbian-issued plates prompted many Serbs to walk out of Kosovo’s police force and other institutions in protest.
Tensions rose further when one such police officer, Dejan Pantic, was arrested for an alleged assault on December 10.
Serbs blocked roads near the border in what Kosovo called an illegal blockade but Serbia defended as a peaceful protest.
Kosovo denied a Serbian claim that it planned to round up ethnic Serbs involved in the unrest.
A series of murky shooting incidents, including one near a Nato peacekeeping patrol, did nothing to ease concerns.
Serbian Prime Minister Ana Brnabic said on December 21 that the region was “on the brink of armed conflicts”.
Could the conflict escalate?
There have been signs of a calmer atmosphere in recent days, with Mr Pantic released in Kosovo, and Serbia saying on Thursday that barricades would be removed.
Mr Borrell said the two countries had shown responsible leadership to defuse tension.
Nonetheless, Serbia said as recently as this week that its military was at the highest level of combat readiness.
Serbia's Mr Vucic asked Nato peacekeepers to let 1,000 of his troops into Kosovo, while accepting they were unlikely to allow it.
Kosovo Prime Minister Albin Kurti accused Belgrade of threatening military aggression.
What do the US and European allies say?
The US, Britain and most but not all EU member states recognise Kosovo’s independence.
Both Serbia and Kosovo aspire to EU membership and the bloc has urged them to stop “fighting in the street”.
A joint statement by the US and EU on December 28 expressed concern about the “continued tense situation”.
Germany accused Serbia of nationalist rhetoric and said it was inflaming tension by stationing troops near the border.
The Serb protesters were accused of throwing stun grenades at members of an EU civilian mission, angering Brussels.
However, Kosovo has not been spared criticism. Prime Minister Kurti has been urged to follow through on a proposed form of self-government for ethnic Serbs.
The EU, which brokered a tentative deal on the licence-plate issue, also said Kosovo had acted impatiently on that front.
How is Russia involved?
Moscow sides with Serbia in rejecting Kosovo’s statehood and has come out in support of Belgrade during the latest flare-up.
“Serbia is defending the rights of Serbs who live near by in difficult conditions,” said Kremlin spokesman Dmitry Peskov.
Many have drawn parallels between Kosovo and eastern Ukraine, where Moscow similarly claims to be an advocate for persecuted Russian speakers.
Serbia has declined to impose sanctions on Russia over the war in Ukraine, while insisting it is not in Moscow’s pocket.
There are fears in Brussels that Russia will try to exploit divisions in the EU’s back yard.
But Mr Peskov said it was “fundamentally wrong to look for some kind of destructive influence of Russia here”.
