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Serbian and Kosovo Albanian leaders launched their first direct talks since a 1999 war on Tuesday, under Western pressure to reconcile by tackling practical problems like power supply and missing persons.

European Union leaders who have pushed the sides to talk hailed the intitial three-hour meeting as a first step, even though Kosovo's ethnic Albanian prime minister stayed away and Serbian leaders also threatened a last minute boycott.

"This is a very, very important meeting. This is the first time that they talk to each other. This is a very important day," EU foreign policy chief Javier Solana told reporters.

The talks, which will be continued in November in@detail by expert groups, are aimed at starting the sides down a path of reconciliation by settling pressing problems such as electricity shortages in Kosovo and the fate of thousands of people missing or made refugees since the war.

But expectations of the first meeting were muted, with EU leaders stressing it was an achievement to get the two sides in one room.

"Let's be realistic. The fact is that this meeting has happened...Did we expect anything spectacular? No. They got into the same room and started talking," Chris Patten, EU commissioner for external relations, told a news conference.

Serbian and Kosovo leaders, who declined to shake hands at the start of the talks and afterwards gave separate news conference, also gave a cautious assessment.

"There was no dialogue, particularly not a direct one. The only good thing is that after several years we sat at the same table with the Kosovo Albanian community representatives," Serbian Prime Minister Zoran Zivkovic said.

Kosovo was put under UN rule in 1999 after NATO bombing to end Serb repression of majority Albanians.

The two sides remain bitterly divided, with Serbia insisting Kosovo remains part of its territory while Albanians demand independence.

The talks deliberatly left out the issue of Kosovo's status in order to focus on solving practical problems.

Issues on the agenda include the fate of 3,700 people still missing, mostly Albanians, and the return of about 180,000 Serbs who fled Kosovo after the fighting for fear of reprisals.

Other topics are Kosovo's need for more power supply from Serbia to cope with chronic electricity shortages, and transport and telecommunications, including winning Serbian recognition for car registration plates issued in Kosovo.

Serbian Prime Minister Zoran Zivkovic and Deputy Prime Minister Nebojsa Covic head the Serbian delegation, while the Kosovo representatives are led by President Ibrahim Rugova and Kosovo Assembly Chairman Nexhat Daci.

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