GRACANICA, Kosovo -- This small town perched on rolling hills is just a 20-minute drive from Pristina, Kosovo's capital, but the two might as well be in different countries.
In Pristina, signs are in Albanian written in the Roman alphabet, and the currency is the euro. Here in Gracanica, the signs carry the Cyrillic letters of the Serbian language, and the currency is the Serbian dinar.
These two worlds symbolize the hopes and fears of ethnic Albanians and Serbs in Kosovo, a majority-Albanian province of Serbia that has been under UN control since the 1999 NATO bombing campaign to stop ethnic cleansing by Serbian forces.
The ethnic Albanians want Kosovo to gain independence from Serbia by the end of the year. And international politicians, diplomats, and specialists on the region indicate that is likely, with strings attached.
For Serbian political leaders, who recognize that Kosovo's future is largely out of their hands, the subject is incendiary. Even mentioning the possibility that the province someday might become independent is viewed as political suicide.
Their unwillingness to entertain alternative policies all but ensures that the Serbs will be the losers in Kosovo, exerting little influence over the futures of people who still live in the province and reducing their country's role as a force in the region.
For the Serbs who live in Gracanica and the 240 other isolated enclaves in Kosovo, such an outcome would be a disaster, leaving them as a defenseless minority in a hostile sea of ethnic Albanians.
''We would be absolutely less safe if Kosovo were an independent country," said Dragan Josifovic, 41, a Serb who sells clothing in a makeshift store lighted by bare bulbs and who, like most Gracanica residents, never visits Pristina, let alone considers living there.
''The police, the security would be less for us, the taxes would be higher, there would be even fewer jobs; they would give the jobs to their friends," Josifovic said.
Today, nearly 95 percent of Kosovars are ethnic Albanian. Barely half of the 200,000 Serbs who lived in the province in 1999 are still here; the rest have fled, mostly to neighboring Serbia proper.
Over the past six years, there has been a reversal in Kosovo's power structure. In 1999, it was ethnic Albanians who were fleeing the fertile, mountainous land when Serbian forces under the command of Yugoslav President Slobodan Milosevic forced nearly 800,000 to flee to neighboring Macedonia and Albania.
The fragility in the region was apparent last month when the prime minister of Kosovo voluntarily resigned and surrendered to the war crimes tribunal at The Hague. He pleaded guilty the next week to 37 counts of war crimes against Serbs.
This summer, the United Nations will evaluate the ethnic Albanian government's success in achieving the goals laid out by UN administrators. If the world body deems the province to have made sufficient progress, talks will begin on Kosovo's status.
Kosovars will have the option to become a sovereign country, remain a province of Serbia, or stay under UN control.
A consensus among US and other Western diplomats seems to be emerging around a scenario in which Kosovo would become independent but the international community still would contribute officers to its police force and judges to the judiciary, especially for help in cases involving ethnically motivated crimes.
''The focus is now on the theme of sustainable multi-ethnicity -- this is central for the international community," a senior Western diplomat in Pristina said.
In Kosovo, antipathy between Serbs and ethnic Albanians runs deep. The two communities are separated by language and religious barriers. Serbs are Serbian Orthodox, a branch of the Eastern Orthodox Church, and most of the ethnic Albanians are Muslims.
When President Boris Tadic of Serbia visited Kosovo in February, he thrilled local Serbs by handing out Serbian flags. Whole towns turned out despite bitter, subzero weather and knee-deep snow.
Serbian papers covered the two-day visit with headlines that read ''No Independence" and ''Consolation to the Endangered." The papers showcased pictures of Serbian villages and churches encircled by barbed wire. Captions described them as ''camps" -- playing on older Serbs' memory of World War II, when Yugoslavia was occupied by the Nazis.
Some of the Serbian enclaves are cordoned off and guarded by NATO troops as well as local police because of the risk of violence against the Serbs.
Last March, ethnic Albanians burned and vandalized 4,000 Serbian homes after three Kosovo Albanian boys drowned and a story circulated that Serbs with dogs had chased them into the river. Nineteen people were killed during the riots. International investigators later concluded that there was no evidence Serbs were involved in the boys' death.