"If what was meant to be achieved by the lawsuits can be achieved through negotiation, the lawsuits become unnecessary. In Croatia, a decision on this matter rests with the government," Josipovic told Serbian news agency Tanjug in an interview.

Josipovic said that last week's acquittal of Croatian generals Ante Gotovina and Mladen Markac by the UN war crimes tribunal in The Hague reduced the chances of Serbia's counter-suit succeeding.

"Several prominent jurists, both in Serbia and Croatia, have noted that the verdict minimises the chances of the counter-suit that was filed by Serbia and that it is of neutral significance to the Croatian suit," Josipovic said, adding that he, as a trained lawyer, agreed with this view but that as President of Croatia he would prefer if "all problems for which the lawsuits were brought were settled and the lawsuits were made unnecessary."

Josipovic said that Belgrade and Zagreb had made visible progress in their relations in the last two years, but that a lot of things still remained to be done. Apart from the mutual lawsuits, among the outstanding issues he cited greater efforts in shedding light on the fate of missing persons from the 1991-1995 war, resolute steps in dealing with the status of refugees, strengthening economic and other forms of cooperation, ending the process of return of cultural treasures, further stepping up the joint fight against organised and cross-border crime, and prosecuting all forms of crime.

"I can understand that we do not see all events in the same way, but politicians should make an effort to ensure that the differences are not insurmountable, or at least that they do not affect those aspects of cooperation that are of paramount importance both to Croatia and to Serbia, to citizens on both sides of the border," Josipovic told Tanjug's correspondent in Zagreb.

The International Court of Justice (ICJ) in The Hague has tentatively scheduled a hearing on the mutual lawsuits for genocide between Serbia and Croatia for February 2014.

In a separate interview with Tanjug on Thursday, international law expert Tibor Varadi said that the ICJ would most probably dismiss the mutual genocide lawsuits, stressing that a negotiated settlement would be in the best interest of the two countries.

Varadi said that it was beyond any doubt that grave crimes had been committed by both parties during the war in Croatia, but that no one had even been charged with genocide, let alone convicted of it.

"That's why I still think it most likely that the ICJ will dismiss both (Croatia's) suit and (Serbia's) counter-suit, while at the same time an oral discussion will further stir up emotions. My opinion is that a negotiated settlement would be in the best interest of the two countries, and whether it will come to that is really hard to say," Varadi said.