Kosovo declared independence from Serbia yesterday, ending a long chapter in the bloody break-up of Yugoslavia.

Serbia responded immediately by calling its mainly Albanian breakaway province a false state and condemning the United States for supporting it, triggering angry scenes outside the US embassy in Belgrade.

The proclamation was made by leaders of Kosovo's 90 per cent ethnic Albanian majority, including former guerillas who fought for independence in a 1998-99 war which claimed about 10,000 civilian lives.

"We, the leaders of our people, democratically elected, through this declaration proclaim Kosovo an independent and sovereign state," said the text read out in parliament by Kosovo Prime Minister Hashim Thaci.

"This declaration reflects the will of the people."

All 109 deputies present at the session in the capital Pristina voted in favour with a show of hands. Eleven deputies from ethnic minorities, including Serbs, were absent.

Kosovo is "an independent, sovereign and democratic state", Parliament speaker Jakup Krasniqi announced after the vote.

Jubilant Kosovans in the snow-covered city had begun celebrating the night before in advance.

But in Belgrade, Serbian Prime Minister Vojislav Kostunica branded the southern region "a false state" in a televised address to his nation just minutes after the vote in Pristina.

He said Kosovo was propped up unlawfully by the US which was "ready to violate the international order for its own military interests".

Serbs vow never to give up the territory, in which their history goes back 1,000 years, but which has been a ward of the UN for nearly nine years. They can do little to stop it, but their one big-power ally Russia stood by them.

Russia said it was calling for UN Security Council consultations over the independence declaration.

The West supports the demand of Kosovo's two million ethnic Albanians for their own state, nine years after Nato went to war to save them from Serbian forces.

Angry Serbs stoned the US embassy in Belgrade to vent their anger at American backing for the breakaway province of Kosovo, smashing windows and a diplomat's car before riot police appeared to regain the upper hand. About 2,000 mostly young demonstrators gathered in downtown Belgrade to protest.

In the ethnically divided Kosovo town of Mitrovica, which is a Serb stronghold, hand grenades were thrown at buildings of the EU and the UN.

Kosovo will be the sixth state carved from the former Serbian-dominated Yugoslav federation since 1991, after Slovenia, Croatia, Macedonia, Bosnia and Montenegro.

It will be the world's 193rd independent country but Serbia says it will never win a seat at the United Nations.

Serbs in the north of Kosovo will reject independence, cementing an ethnic partition that will weigh on the new state for years to come. Fewer than half of Kosovo's 120,000 remaining Serbs live in the north, while the rest are in scattered enclaves protected by Nato peacekeepers.

The US and most EU members are expected to quickly recognise Kosovo, despite failing to win United Nations Security Council approval - blocked by Russia last year.

The EU will also send a supervisory mission to take over from the current UN authorities.

Mr Thaci sought to reassure Serbs, saying "Kosovo is the homeland of all its citizens". He said Kosovo was committed to a Western-backed plan for independence, supervised by the EU and providing guarantees for the Serb minority.

The EU, which on Saturday endorsed a police mission to Kosovo, will meet today to discuss the secession.

Snow blanketed Pristina after a night of early celebration with thousands of Albanians pouring into the streets ahead of schedule. Banners proclaimed "Happy Independence".

"Today, a new life begins. The past should not be forgotten, but it belongs to the past, and should be forgiven," the Kosovo daily Koha Ditore wrote.

"This is the happiest day," said Tahir Bajrami, an elderly Kosovo Albanian who flew from New York to join the celebrations. "We were prisoners, but this marks a new beginning."

Russia backed ally Serbia yesterday in condemning Kosovo's declaration of independence and called for the United Nations to annul the move Serbia's prime minister said was accomplished to further US military goals.

The immediate US response to Kosovo's long-anticipated decision to split from Serbia was muted by comparison. The State Department said it noted the declaration and was "reviewing the issue and discussing the matter with its European partners".

It called on all parties to "exercise the utmost restraint and to refrain from any provocative act".

The European Union's foreign policy chief also called for stability in Kosovo and the whole Balkan region. "I urge everybody to act calmly and in a responsible way," Javier Solana said in a statement.

But despite the appeals for calm, the stage was set for tense diplomatic sessions over the latest turn in the long and bloody break-up of Yugoslavia, and possible new crises as breakaway regions far from the Balkans said Kosovo's move strengthened their own independence bids.

"The situation with Kosovo is a precedent," Russia's Interfax news agency quoted Abkhazia's President Sergei Bagapsh, whose country seeks independence from Georgia, as saying.

"All the talk about the Kosovo situation being unique is an example of a policy of double standards," he added.

Kosovo's break with Serbia was watched closely by regions far from the Balkans seeking independence.

Georgia's breakaway regions of Abkhazia and South Ossetia, Azerbaijan's rebel Nagorno-Karabakh region and Transdniestria, which split from Moldova, all declared independence in the 1990s but have not received international recognition.

After Kosovo's declaration, South Ossetia's leader, Abkhazia's President, Nagorno-Karabakh's Foreign Minister all said the move strengthened their positions.

The separatist Parliament in the Trandniestria region was expected to issue a statement today on Kosovo's declaration.

Nato said it would continue to provide security in Kosovo and deal firmly with any violence.

"All parties should recognise that KFOR will continue to fulfil its responsibility for a safe and secure environment throughout the territory of Kosovo... unless the (UN.) Security Council decides otherwise," Nato Secretary-General Jaap de Hoop Scheffer said in a statement.

The EU will send a supervisory mission to take over from the current UN authorities. Nato ambassadors were due to meet today to discuss Kosovo, as are EU foreign ministers.