Ivica Dacic met Kosovo's Hashim Thaci at talks chaired by EU foreign affairs chief Catherine Ashton.
Kosovan Prime Minister Hashim Thaci called the decision a "historic turnaround" for the state.
Hashim Thaci is a veteran of the Kosovar Albanians' drive to break away from Serbia.
Meanwhile, Mr Thaci underwent a gradual process of transformation from left-wing guerrilla to mainstream political leader.
Within the K.L.A., Thaci had been known as the Snake a reference to his slippery evasion of Serbian authorities.
Mr Thaci urged Kosovo Albanians to build a tolerant democracy to serve as an example across the Balkans.
Hasim Thaci was born in 1968 in the Drenica region, a stronghold of the Albanian revolt against Serbia.
Mr Thaci condemned the protesters, saying they were "opposed to progress in Kosovo".
By all informed accounts, Mr Rugova's lot is far more popular than the young thugs who look to Mr Thaci.
Last year, I met Prime Minister Thaci in his office, on the second floor of a drab fourteen-story tower in central Pristina.
Meanwhile Mr Thaci said the settlement would help pave the way for both Kosovo and Serbia to join the EU and Nato.
In 2008, Thaci became the first Prime Minister of an independent Kosovo.
The deal was reached after months of tense negotiations between Serbian Prime Minister Ivica Dacic and Kosovo Prime Minister Hashim Thaci in Brussels.
Serbian Prime Minister Ivica Dacic said he had not been able to reach agreement with his Kosovo counterpart, Hashim Thaci, on normalising ties.
On Friday Hashim Thaci, Kosovo's prime minister, addressed journalists saying that all would be done to look after and protect minorities in Kosovo.
Mr Thaci told reporters in Brussels that Kosovo had put forward proposals that would have integrated all citizens, including ethnic Serbs, into the life of Kosovo.
The head of the rebel army's political wing, Hasim Thaci, 29, who was the Kosovars' chief negotiator in France, felt obliged to defer to Mr Demaci.
One of its more strident figures, Menduh Thaci, said that, though he hoped the stand-off in Tanusevci would end peacefully, Macedonia's forces had the right to act if it did not.
Last October, Kosovan Prime Minister Hashim Thaci had talks with his Serbian counterpart Ivica Dacic in Brussels - the first direct political contact between the two sides since Kosovo proclaimed independence in 2008.
The protest was organised following last week's talks between Mr Thaci and his Serbian counterpart Ivica Dacic in Brussels - the first direct political contact between the two sides since Kosovo proclaimed independence in 2008.
Instead, Hashim Thaci, the ex-commander of the Kosovo Liberation Army guerrillas who now heads a political party, has been stressing that the Yugoslav election is illegitimate and that no voting for Belgrade institutions should be taking place on Kosovar soil.
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