Lithuania has reached a breakthrough in its strained relations with Serbia as Belgrade seeks closer EU ties, the countries' prime ministers say.

Lithuanian Prime Minister Algirdas Butkevicius and Serbian counterpart Ivica Dacic said at a news conference Tuesday in Vilnius they are putting disputes behind them as Lithuania considers whether to ratify Serbia's Stabilization and Association Agreement with the European Union.

Lithuania is only EU country yet to approve the key agreement, which Serbia needs to continue on its path toward membership in the European bloc.

But Butkevicius said that after talks with Dacic, he backed the Serbia's EU bid.

"Lithuania supports Serbia's integration into the EU," he said. "In my opinion, today's meeting can be regarded as a kind of a breaking point in the relations between Lithuania and Serbia and the renewal of the dialogue."

The Baltic nation will hold the rotating presidency of the EU Council this year.

Vilnius has been a persistent critic of Serbia, citing the nationalization of Lithuanian investments in the country as well as the successful bid by Serbian Foreign Minister Vuk Jeremic to defeat Lithuanian U.N. Ambassador Dalius Cekuolis for the presidency of the U.N. General Assembly last year.

During a bitter battle for the post, Cekuolis accused Russia of backing Jeremic to punish Lithuania for its vocal denunciations of the former Soviet Union's forcible annexation of the Baltic nations during World War II.

"We discussed topical issues pertaining to Serbia's integration into the European Union as well as other matters of coherent bilateral cooperation, the strengthening of relations, closer business ties and the possibilities of better business environment," Butkevicius said.

"I think we should put all this behind us and overcome the problems," Dacic added. "Serbia and Lithuania are friendly countries and have no reason for the problems in their relationship."

He added that Serbia will "analyze and propose solutions" to the problems of the Lithuanian investment in Serbia.

Vilnius has repeatedly criticized Serbia's moves to nationalize investments made by the Lithuanian firms Arvi, Alita and Sanitex. While such disputes are normally resolved through international arbitration, Serbia instead wants to resolve them at the national court level.

Dacic said Tuesday the issues could be addressed by working groups set up specifically for that purpose.

Serbian Foreign Minister Ivan Mrkic and Lithuanian counterpart Linas Linkevicius signed a memorandum of cooperation on EU integration during the meeting, while the two prime ministers also signed a pledge to pool resources to fight organized crime, which Dacic called "a good basis for the further development of relations."

If it can secure Lithuania's ratification of the EU stabilization and association agreement, the focus of Serbia's European integration effort can progress to direct accession negotiations with Brussels.

EU members should decide on the start of Serbian negotiations by June but Belgrade's inability to reach an agreement with Kosovo on the protection of 50,000 ethnic Serbs in the northern part of its Albanian-dominated former province could undermine the process.

Belgrade this month rejected an EU-mediated proposal with Kosovo but another round of talks was possible before EU Foreign Policy Chief Catherine Ashton issues a recommendation on if the accession talks should proceed.