President Tadic’s Democratic Party and PM Kostunica’s Democratic Party of Serbia continued to disagree over formation of new government; Kostunica insisted on remaining PM. Government adopted, unconstitutionally, temporary budget without parliamentary approval to prevent government shut-down. 5 men arrested and weapons seized during police raids on alleged Wahhabi training camp in Sandzak. Split between Belgrade Mufti Hamdija Jusufspahic and Sandzak Mufti Muamer Zukorlic as latter created competing Islamic Community encompassing majority of Serbia’s Muslims.

Political elite rejected UN envoy Ahtisaari’s Kosovo status proposal 1 February: Kostunica called it “illegitimate”; Tadic “unconstitutional”. Newly-elected parliament held inaugural session 14 February: rejected proposal, adopted hard-line resolution and authorised negotiating team for Vienna talks (see Kosovo). Talks began 21 February: Serbia proposed Serbian entity with Serbian police and rejected the principle of succession for dividing assets. Serbian media began openly speculating about partition of Kosovo. ICTY Chief Prosecutor Carla Del Ponte told EU on 14 February that Serbia is not cooperating with Tribunal. Government not yet formed, budget for 2007 stalled. International Court of Justice issued judgment on alleged genocide during Bosnian war (see Bosnia & Herzegovina). Serbia’s Islamic community formed Rijaset (religious leadership) 19 February and named new head Hamdija Jusufspahic, marking split with Bosnian, possibly Sandzak, Muslims.

Parliamentary elections held 21 January: Serbian Radical Party led with 28% of vote followed by President Tadic’s Democratic Party (23%) and PM Kostunica’s Democratic Party of Serbia (16%). President Tadic began consultations on forming coalition; stance of smaller parties (G17+, SPS and Liberal Democrats) may be crucial. Kostunica insisted on retaining PM post, announced would not meet UN envoy Ahtisaari on 2 February (see Kosovo), and threatened to sever diplomatic ties with countries that recognise Kosovo independence, making policy precondition for entering a governing coalition. Parties have nearly 4 months to form government. Hungarian, Bosniak, Roma and Presevo Valley Albanian parties all gained parliament seats.

Supreme Court overturned war crime conviction of 14 men for 1991 Vukovar massacre, ordering retrial: all 3 domestic convictions for war crimes have now been overturned. Former head of state security said 1999 killing of journalist Slavko Curuvija probably ordered by state. 4 Presevo Valley Albanian parties announced end to 10-year boycott of Serbian politics, with coalition for 21 January elections, but 2 later withdrew, citing presence of Serbian security forces in valley. NATO opened liaison office in Belgrade 18 December, week after Partnership for Peace program accession. Hague trial of Radical Party leader Vojislav Seselj began in his absence; Seselj ended hunger strike 8 December.

New constitution ratified by parliament after official final results of October constitutional referendum announced: 53.04% of registered voters supported new constitution with 54.91% turnout, despite well-documented irregularities. Parliamentary elections set for 21 January. NATO announced would admit Serbia into Partnership for Peace program despite failure on ICTY conditionality. UN said would postpone Kosovo status decision until after elections (see Kosovo). In Sandzak’s Novi Pazar, Party for Democratic Action activist injured in bomb attack on home.

Government announced new constitution had been approved in 28-29 October referendum, but opposition and observers alleged massive irregularities. Turnout officially reported at 54.2%, with those in favour just over required threshold of 50% of electorate. Serb Radical Party re-elected leader Vojislav Seselj, currently in Hague on war crimes charges. Deputy state prosecutor Milorad Cvijovic arrested in corruption probe. Leadership continued to send hard-line messages on Kosovo: President Tadic warned Serbia had “right to defend its borders"; PM Kostunica said will consider any country recognising Kosovo independence as enemy.

Parliament unanimously rubber-stamped new constitution, which declares Kosovo integral part of Serbia, with no discussion or public debate 30 September; set ratification referendum for 28-29 October. PM Kostunica and President Tadic discussed desirability of early elections. G17+ leader and Finance Minister Mladan Dinkic announced party leaving government as CrisisWatch went to press. Tensions rose in Bosniak-majority Novi Pazar town after municipal assembly candidate for victorious List for Sandzak (LZS) shot dead outside polling station during 10 September local election. LZS coalition leader Ugljanin accused bodyguards of Sandzak Democratic Party leader Ljajic; 2 arrested. Tadic signed status of forces agreement with U.S. administration 7 September.

EU progress remained deadlocked over failure to arrest war-crime suspects. PM Kostunica and President Tadic struggled publicly over who will control army’s newly created combined special forces unit. EU and OSCE criticised parliament’s planned restrictive amendments to broadcasting law vetoed by Tadic in July but due for re-discussion in assembly. Coordination Centre for Kosovo head Raskovic-Ivic floated idea of Kosovo partition 11 August, but Belgrade disowned proposal after international criticism. Government accused UN envoy Ahtisaari of bias after he said Serbs had to bear burden for crimes committed in Kosovo 1998-9.

Agenda dominated by Kosovo (see Kosovo). EU adopted new separate mandates for Stabilisation and Association Agreement negotiations with Serbia and Montenegro; resumption of talks with Serbia still dependent on arrest of war crimes suspect Mladic. U.S. urged Serbia to capture Mladic and compromise on Kosovo status. Government adopted action plan to arrest Mladic. Parliament rushed through amendments to law on “radio-diffusion”, which would strengthen state control over media, but President Tadic refused to sign law. Supreme Court Judge Vuckovic given 8- year prison sentence for taking bribes from criminal gang.

Government unsettled by Montenegrin independence, but parliament proclaimed Serbia legal successor to State Union on 5 June; vote boycotted by opposition. Serbia belatedly recognised Montenegro 15 June and dissolved joint institutions. Ivana Dulic-Markovic appointed deputy PM following May resignation of Miroljub Labus. PM Kostunica told by UK PM Blair to prepare for Kosovo independence. Kostunica made provocative 28 June visit to Kosovo on historic Kosovo Polje anniversary and declared Kosovo will always be part of Serbia. President Tadic undertook goodwill tour of region. Second protected witness in Djindjic assassination trial found dead 3 June.