"There is a need to have solutions for free trade and border cooperation and we are not interested in having parallel (Serb) structures in Kosovo," Merkel told reporters after talks with Kosovo Prime Minister Hashim Thaci.

She said that barricades Serbs put up this year to block traffic in north Kosovo, bordering Serbia, should be removed.

Thirty German and Austrian soldiers were injured earlier this month when hundreds of Serbs resisted an attempt by NATO to remove roadblocks they had put up in the north. The violence prompted the European Union on December 9 to shelve Serbia's bid for the status of candidate for EU membership, said Reuters.

According to Reuters, Germany has the biggest military contingent in Kosovo, with some 1,800 soldiers serving in NATO's peacekeeping mission in the former Serbian province. The NATO commander there is German.

Merkel said in Pristina that she had talked to Serbian President Boris Tadic "to find ways to normalise relations and we would like Kosovo to make its contribution too and continue contacts with Serbia and President Tadic."

"Troubles in the north Kosovo started in July when Kosovo sent special police units to the northern border to enforce a trade ban with Serbia but were turned back by armed Serbs. Then NATO troops, mainly German soldiers, intervened to try to calm the situation.

"The row with Kosovo cost Serbia its EU candidate status. EU leaders assessed that Serbia had not done enough to improve relations with its former province," said Reuters.

The agency also quoted Thaci as saying after talks with Merkel that he would pursue talks with Serbs in the north and with Belgrade.

"In the north, the government is not in conflict with the citizens, but law is in conflict with anarchy. We have good relations with Macedonia, Albania, Montenegro. We would like to have good relations with Serbia, too," he said.