By ROBERT WIELAARD
.c The Associated Press
 

ZAGREB, Croatia (AP) - European Union leaders held their first summit in a formerly Communist country on Friday, reaching out to a region where post-Cold War movement toward democracy and market reforms was delayed by a decade of war in the former Yugoslavia. 

At a one-day meeting with counterparts for Bosnia-Herzegovina, Croatia, Macedonia, Yugoslavia and Albania, EU leaders offered $4 billion in economic aid and duty-free access for 95 percent of the Balkan nations' industrial and farm products. 

More importantly, they promised that the door to EU membership is open - when the countries are ready. EU rules say only democratic nations, living in peace with their neighbors and with market economies and solid human rights records need apply. 

Participants stressed both the progress the countries in the region have made and the hard work they face before they can be fully integrated into the family of European democracies. And amid talk of a brighter future, the region's past weighed on the summit. 

Hundreds of Croatian war veterans and others protested in their country's capital, demanding that the region's leaders atone for past war crimes before embarking on the kind of reconciliation the summit was preaching as the clearest path toward progress. 

They also wanted Yugoslavia's new president, Vojislav Kostunica, to apologize for atrocities committed by Croatian Serbs loyal to his predecessor, Slobodan Milosevic, in Croatia's 1991 war for independence from Yugoslavia. That conflict ignited wars elsewhere in the region. 

Although Kostunica has distanced himself from the policies of Milosevic, Croats blame Yugoslavia for starting the wars that followed the federation's disintegration in 1991. 

French President Jacques Chirac, whose country currently holds the EU presidency, said that while the EU was ready to embrace the countries of ex-Yugoslavia, they must cooperate with the Yugoslav war crimes tribunal in The Hague. 

German Foreign Minister Joschka Fischer, addressing a concern of other countries in the region, said the EU will not give Serbia priority treatment now that Milosevic is out of office, adding, ``We want to pursue a policy of equality.'' 

In 1998, the EU opened membership negotiations with Cyprus, Malta and 10 East European nations. The countries attending Friday's meeting lag far behind because of a decade of conflict and unrest. 

To close the gap, the EU has invented ``Stability and Association Agreements'' that offer closer economic and political ties and keep the membership door ajar. 

The EU leaders initialed such an agreement with Macedonia and opened negotiations for a similar accord with Croatia which elected a democratic government in January, one month after the death of President Franjo Tudjman. 

Also attending was Montenegro, Serbia's reluctant sister republic in the truncated Yugoslavia, and Kosovo, Serbia's ethnic Albanian province under U.N. supervision since NATO's 1999 air war that ended Belgrade's crackdown on the separatist-minded territory. 

Kosovo was represented by Bernard Kouchner, the chief U.N. administrator there. He hailed democratic changes in the past year in Croatia and Yugoslavia and spoke of ``a new trend in the region ... toward moderation and democracy.'' 

Slovenia was also attending because it used to be part of the old Yugoslavia. Slovenia split from ex-Yugoslavia in the early 1990s and already is negotiating for full EU membership. 

AP-NY-11-24-00 0837EST

Copyright 2000 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press.  All active hyperlinks have been inserted by AOL.