Kosovo became on Sunday the world's newest state after its parliament overwhelmingly endorsed a declaration of independence from Serbia in an historic session.

The declaration, read by Prime Minister Hashim Thaci, said Kosovo would be a democratic country that respected the rights of all ethnic communities.

The US and a number of EU countries are expected to recognise Kosovo on Monday.

Serbia has threatened Kosovo with diplomatic and economic sanctions, but not force. Its ally, Russia, also opposes Kosovan independence.

With a televised address to the nation Serbia's Prime Minister Vojislav KoЕЎtunica declared Kosovo's declaration of independence null and void, based on Serbia's right as an internationally recognized and sovereign member of the United Nations.

"Serbia will never recognise the independence of Kosovo. Serbia has reacted and will react with all peaceful, diplomatic and legal means to annul this act committed by Kosovo's institutions," Serbia's President Boris Tadic said.

Celebrations began in Kosovo's capital, Pristina, late on Saturday in anticipation of the expected declaration of independence, Vladislav Velev, Darik radio correspondent in Pristina reported.

Tens of thousands of Kosovans poured into the streets, dancing, setting off fireworks and waving the flags of Albania, the United Kingdom, the United States, the European Union and NATO.

The streets have been abundantly decked with posters and billboards, reading "Happy Independence Day" and " Let's celebrate with dignity".

Correspondents say the potential for trouble between Kosovo's Serbs and ethnic Albanians is enormous.

Also on Saturday the European Union said it would launch a mission in Kosovo to help the government establish a police force and court system.

The mission will be phased in over the next six months and will eventually replace the current U.N. administration there, the EU statement said.

The EU said Saturday that "around 1,900 international police officers, judges, prosecutors and customs officials and approximately 1,100 local staff will be based in headquarters in Pristina or located throughout the judicial and police system in Kosovo."

The EU mission's objective is "to support the Kosovo authorities by monitoring, mentoring and advising on all areas related to the rule of law, in particular in the police, judiciary, customs and correctional services," it said.

Kosovo has been under U.N. control since shortly after NATO warplanes forced out Serbian forces in 1999. NATO acted after Serbian forces repressed an uprising of ethnic Albanians in Kosovo with a brutal campaign that spawned reports of ethnic cleansing and an exodus of tens of thousands of refugees.

Ninety percent of Kosovo's 2 million people are ethnic Albanian - most moderate or non-practicing Muslims, the rest are Roman Catholics.

A total of 30,000 ethnic Bulgarians live in Kosovo, predominantly Muslims, populating more than thirty villages close to Macedonia's border.

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