Speaking to Serbian news agency Tanjug, Josipovic has said he expects visible progress in refugee return, the tracing of people missing from the early 1990s war, the restitution of works of art, the border regime, the fight against organised crime, and in cooperation between the two police forces and state prosecutor's offices.

He does not expect considerable headway in the settlement of border disputes or regarding the genocide lawsuits Croatia and Serbia have filed against each other at the International Court of Justice.

In the interview released on Saturday, Josipovic said that after his informal meeting with Serbian President Boris Tadic in Opatija, Croatia, it was said that the lawsuits were not an end to themselves and that good relations and the settlement of outstanding issues which were the subject of the lawsuits might make the lawsuits unnecessary.

"I think things are moving in that direction, but it's up to the government to decide if and when it will withdraw the lawsuit and I think the Croatian government thinks along the same lines. Let time take its course, let's resolve problems and once we do, we will certainly have a lot more room to discuss this subject."

Speaking of refugee return, Josipovic was quoted as saying that Croatia had not done all it could have on this front in the past but that the situation was much more different now.

"My message to all who left Croatia is: Come back, the doors are open and we will do what we can. Croatian-Serbian cooperation on this front has been at a much higher level recently."

Josipovic was quoted as saying that those wishing to return should be given back their property, adding that new jobs should be opened in order to ensure a sustainable return.

The economy has to be one of the most important fronts for improving Serbia-Croatia cooperation and the two governments should open markets as much as possible, providing equal business conditions for all potential investors, Josipovic said.

He went on to say that upon accession to the European Union, Croatia would not make even one bilateral issue with its neighbours an obstacle to European and Euro-Atlantic integration.

"Rest assured, and this policy is also advocated by Prime Minister Jadranka Kosor, that Croatia will help all neighbours, including Serbia, join the EU as soon as possible. We'll try to resolve outstanding issues with the awareness that sometimes compromise is necessary, too, and we won't mix bilateral and multilateral issues," Josipovic was quoted as saying.

He is scheduled to begin his two-day visit to Serbia by meeting his host Tadic on Sunday morning.