By Ivana Sekularac
BELGRADE (Reuters) - Serbia's Socialist Party has brokenoff coalition talks with the nationalist bloc and is startingnegotiations with the pro-European alliance led by theDemocratic Party, officials said on Saturday.
Socialist leader Ivica Dacic told the state news agencyTanjug there was "no common view regarding the key issues" withthe nationalists.
Options for the country now were a new election, aSocialist coalition with the pro-European bloc, or a governmentwithout the Socialists.
A Socialist alliance with the Democrats has been seen as adone deal in recent weeks, with media and political sourcessaying the two parties had been in secret talks for some time.
A statement from the Democratic Party, led by PresidentBoris Tadic, said: "Coalition talks (with the Socialists) ...will begin tonight at 8 p.m. (7 p.m. British time)."
The Democrats came first in the election on May 11, butfell short of the 126 seats needed in the 250-seat parliament.
The nationalist Radicals and the DSS of outgoing PrimeMinister Vojislav Kostunica joined forces after finishing insecond and third place.
They were brought together by their virulent opposition tomembership of the European Union, which backed independence forthe province of Kosovo in February.
But efforts by the nationalists to lure the Socialists, andtheir 20 MPs, into an alliance stumbled on the EU issue. TheSocialists refused to freeze Serbia's bid for EU membership,arguing that the resulting economic progress is key to thegenerous social policy they stand for.
The Democrats have made clear they are ready to seal acoalition with the Socialists at any cost, in the spirit of a'forgive-and-forget national reconciliation'.
Once bitter critics of former leader Slobodan Milosevic'saggressive nationalism in the Yugoslav wars of the 1990s, theDemocrats now say they will help the Socialists renew theirimage and could water down economic reforms to accommodate theSocialists' populist agenda.
Political sources say the Democrats would also offer theSocialists several powerful ministerial posts and lucrativepositions in Serbia's many state companies.
(Writing by Ellie Tzortzi; Editing by Giles Elgood)