Serbia intends to formally apply for European Union membership by the end of the year, Serbian Foreign Minister Vuk Jeremic said Thursday.

- The basic groundwork has been laid out for Serbia to submit its application for membership to the European Union, and we have a strong intention to do it before the end of this year - Jeremic told reporters in Brussels after talks with EU Enlargement Commissioner Olli Rehn.

Rehn praised Serbia's "considerable progress over the past 12 months" and the government's concerted efforts -in driving legal, democratic and economic reforms further. -

He added that - Serbia has already for some time been cooperating very well - with the UN's International Criminal Tribunal for the former Yugoslavia in The Hague.

The court is seeking to bring to justice war crimes suspects, notably former commander of the Bosnian Serb armed forces Ratko Mladic.

The Netherlands refuses to agree on a key EU-Serbia rapprochement accord while Mladic remains at large. However, Rehn suggested that Serbia had now done enough to ease Dutch concerns.

The Netherlands is still haunted by the Srebrenica massacre of around 8,000 Muslim men and boys. Mladic is accused over the massacre, which was Europe's worst atrocity since World War II.

A Dutch UN battalion pulled out of the eastern enclave which it was protecting in July 1995, just before the massacre.

The nub of the problem is whether Serbia's "full cooperation" with the international court requires that Mladic is brought to The Hague.

Earlier in the day Jeremic told EU parliamentarians that the Serb authorities are "in the process of searching every square millimetre of our national territory" for the fugitive.

As well as Srebrenica, Mladic is accused of being behind the 44-month siege of Sarajevo that left 10,000 people dead.

- If we knew where he was, he would not be at liberty, I can guarantee that - Jeremic said.

While making encouraging noises, EU Commissioner Rehn declined to say whether he agreed that Serbia should apply for EU membership in the coming months.

- I respect the sovereignty of the Serbian Republic as regards such important decisions as submitting a membership application - he told a joint press conference.

As well as the Mladic issue, the European Commission also wants Serbia to adopt a "more constructive attitude" to Kosovo, the largely ethnic Albanian former Serb republic which is now widely recognised as a separate state.