"We, the democratically elected leaders of our people, hereby declare Kosovo to be an independent and sovereign state," said the declaration.

"This declaration reflects the will of our people."

The declaration was read to the Kosovan parliament by Prime Minister Hashim Thaci.

Thaci was formerly a guerrilla commander during the 1998-99 war, fighting against the late Serb leader Slobodan Milosevic.

All 109 deputies present at the parliament voted unanimously with a show of hands.

The new Kosovan flag, with the outline of Kosovo in yellow on a blue background under six stars, was then carried into parliament.

"We feel the end of Serbia in Kosovo," said one onlooker.

"I can't believe I'm alive to see this day," said another.

Serbian Prime Minister Vojislav Kostunica was quick to brand the newly autonomous Kosovo as 'a false state.'

In a televised address, he described the US backers of the regime in Kosovo as 'ready to violate the international order for its own military interests.'

Up to 2,000 aggrieved Serbs converged on the US embassy in Belgrade, hurling stones, smashing windows and lighting firecrackers.

In the Kosovo Serb stronghold of Mitrovica, three hand grenades were thrown at UN and EU buildings.

"We'll see what happens during the night," said one Serb in Mitrovica.

"There will be a lot of armed people here."

Russia, a long term ally of Serbia, called for an emergency session of the UN Security Council.

But such a move would be unlikely to deter the United States and most EU members from recognising Kosovo.

Thaci was careful to address Serbian concerns directly, saying that 'Kosovo is the homeland of all its citizens.'

He said than Kosovo's newly independent state would provide guarantees to the Serb minority, ensuring that they would not become second-class citizens.

"Today, a new life begins," the Kosovo daily newspaper Koha Ditore wrote.

"The past should not be forgotten, but it belongs to the past, and should be forgiven."