- The Washington Times - Tuesday, February 26, 2008

BELGRADE, Serbia (AP) — Russia signed a gas pipeline deal with Serbia yesterday, underscoring Moscow’s traditional ties with Belgrade even as tensions with the U.S. and other nations rise.

The plan clears the way for the construction of the South Stream pipeline through Serbia en route to Western Europe.

The agreement, expected to be worth as much as $1.5 billion, is the centerpiece of a visit to Serbia by Dmitry Medvedev, President Vladimir Putin’s chosen successor and the man expected to easily win Russia’s presidential election March 2.

Mr. Medvedev said the pipeline deal, along with others, “form the foundation of energy stability for all of Europe in the future.”

Mr. Medvedev also toured Serbia’s oil refinery in Pancevo, just outside Belgrade, where he said that a deal to buy Serbia’s state oil company, NIS, will be signed soon.

Russia has offered $600 million, with an additional $730 million to modernize the run-down company — a price government critics say is too low.

Though Mr. Medvedev’s visit has focused mostly on economic issues, talks with President Boris Tadic and Prime Minister Vojislav Kostunica also addressed the turmoil in the aftermath of Kosovo’s recent declaration of independence from Serbia.

Serbs reject Kosovo’s independence as illegal.

On Thursday night, a mob set fire to the U.S. Embassy in Belgrade, angered over U.S. recognition of Kosovo’s independence.

The United States and some European Union nations quickly recognized Kosovo’s declaration of independence last week, but Moscow sided with Serbia and said it will block Kosovo from joining the United Nations or other international organizations.

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