Serbia pledged on Thursday to back Croatia's efforts to join the European Union and the leaders of both countries sought to improve ties shattered by the Balkan wars of the 1990s.

Speaking on the sidelines of the 15th Central European Summit in the city of Novi Sad, Serbian President Boris Tadic said he and Croatian President Stjepan Mesic agreed "to widen security, economic and political ties."

"Such ties are leading both of us toward the EU ... we are backing Croatian efforts (to join the bloc) as Croatia would spearhead EU accession of other Western Balkan countries," Tadic said.

Tadic said economic cooperation between the two states must be improved.

Serbia and Croatia both took part in the Balkan wars in the 1990s during the breakup of the former Yugoslavia. Although their relations improved after the end of conflict in 1995, issues including the return of wartime refugees and war crimes committed by both sides remain unresolved.

Mesic said Serbs who fled a 1995 Croat offensive and took refuge in Serbia should be able to return to Croatia. Many Croatian Serbs are reluctant to return to their homes, fearing persecution.

"We should hand over lists of all wanted people to prosecutors (in Serbia) ... people must know if they are wanted or not ... so they can return without fear," Mesic said.

Croatia's bid to join the EU is hampered by a maritime border dispute with neighbouring Slovenia, an EU member.

Dealing with war crimes committed by Serb forces in Croatia and Bosnia has been the major obstacle for Serbia's progress toward EU membership, set as a priority by the country's government.