WASHINGTON: Former foes Kosovo and Serbia have agreed on a historic pact to normalize economic relations, US President Donald Trump announced Friday at the White House. And in a fresh diplomatic success for the US leader, both Kosovo and Serbia also agreed to improve their relations with Israel - Kosovo will formally recognize the Jewish state and Serbia will move its embassy from Tel Aviv to Jerusalem.

"A truly historic day," Trump said, with Kosovo Prime Minister Avdullah Hoti and Serbian President Aleksandar Vucic sitting beside him in the Oval Office.

"By focusing on job creation and economic growth, the two countries were able to reach a real breakthrough on economic cooperation across a broad range of issues."

Trump praised his special emissary Richard Grenell for bringing the two sides together, two decades after they fought a bloody war that left 13,000 dead. "It took decades because you didn't have anybody trying to get it done," Trump said of the agreement.

"There was a lot of fighting and now there's a lot of love," he said. "Economics can bring people together."

Speaking to reporters in the White House, Vucic said Trump had done a "great job," praising his commitment to the Balkan region, while Hoti called it a big step forward - though neither Serbia nor its former territory formally recognize the other.

Kosovo President Hashim Thaci hailed the agreement in a statement, praising Trump for advancing the cause "of peace, economic development and Euro-Atlantic future."

Kosovo, which declared its independence from Serbia in 2008, "must now continue to work for membership in international organizations and for new recognitions, for our country to be fully consolidated domestically and internationally," he wrote.

Details of the agreement were not immediately available, but it was expected to be limited to the normalization of some economic ties, easing commerce and opening up road, rail and air links between the former Balkan war foes.

The talks included representatives of major US economic aid agencies including the Export-Import Bank, suggesting US financial support was involved in bringing the two sides together. The European Union has brokered talks for nearly a decade to thaw the bitter relationship between Serbia and its former territory, but many of the agreements they set have not been implemented. An effort focused on business and commerce was launched more recently by US officials.