The two-day talks at the Daun-Kinssky Palace in Vienna, Austria, were part of a concerted attempt by major Western powers to resolve one of the toughest disputes left from the 1990s ethnic Balkan conflicts: whether Kosovo should gain full independence or remain part of Serbia-Montenegro.
Albert Rohan, the UN's deputy envoy at the talks, said on Tuesday that the first encounter was held in a "cooperative spirit" and mediators found some common ground during discussions.
He set the next meeting for 17 March.
Both delegations, which made their diametrically opposed ambitions clear before they came to Vienna, presented their positions for several hours on issues of how much power should be devolved locally in health care, education and police to municipalities, especially to areas where Serbs form a majority.
Rohan said the talks were not aimed at reaching a specific agreement but rather to listening to both sides and trying to find common ground on issues not directly linked to Kosovo's status.
"We want to identify the maximum of common ground, of partial agreements, all this knowing that nothing is agreed until everything is agreed," Rohan said.
Leon Kojen, a Serb delegate, said the talks were "useful" but that the two sides remained opposed on Kosovo's future status.
"Solutions which contravene the territorial integrity of (Serbia - Montenegro) for us are unacceptable," Kojen said
Mass graves unearthed in Kosovo
bear testimony to ethnic hatred
after the meeting.
Lutfi Haziri, the head of the Kosovo delegation, said the province should become independent "as soon as possible. If it is possible tomorrow, we would be happy", he said.
Rohan said UN mediators were tackling practical issues in the hope of reaching a final agreement by the end of 2006.
"Discussions on status could have ended in two hours," Rohan said.
Ethnic Albanians, who comprise about 90% of the province's population of two million, want independence.
Serbia insists on retaining some control over the region, which it considers an integral part of the nation and the birthplace of its national identity centuries ago.
The UN has administered the province since 1999, after Nato launched air attacks to stop a crackdown on independence-minded ethnic Albanians by Slobodan Milosevic's Serb forces.
Thousands of people died and hundreds of thousands were displaced during the war, and the end of hostilities did not bring the two sides any closer to a resolution.
"We want to identify the maximum of common ground, of partial agreements, all this knowing that nothing is agreed until everything is agreed"
UN's deputy envoy
Rohan conceded that it might take a generation to bring the two sides to live together in harmony after the bloodshed of the 1990s. For now the best hope for them is if they cohabit, Rohan said.
The overall process is being mediated by Martti Ahtisaari, the former Finnish president.
Diplomats from the so-called Contact Group - the US, Britain, Germany, France, Italy and Russia - have already agreed on a set of guidelines for Kosovo's future.
Those rules say the province cannot return to its previous status under direct Serb rule, nor can it be partitioned along ethnic lines or be joined to another country in the region, such as Albania.
They also stipulate that any agreement should be acceptable to the province's ethnic Albanians.
The two sides have disagreed over how much power should be held locally, with the province's minority Serbs insisting they be allowed to run affairs in their communities, link up with other Serb areas and have special ties to Belgrade.
Kosovo's ethnic Albanians say such a solution is a recipe for ethnic partition.