Pro-Western incumbent Boris Tadic won Serbia's presidential election Sunday against an ultra-nationalist ally of the late autocrat Slobodan Milosevic.

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Serbia's presidential candidate Boris Tadic addresses media after his headquarters claimed victory in presidential elections, in Belgrade, Serbia on Sunday. ((Darko Vojinovic/Associated Press))

The state electoral commission and independent vote monitors said Tadic won about 51 per cent, while Tomislav Nikolic had 47 per cent in the closely contested race. The remaining ballots were invalid.

"Serbia has shown its great democratic potential," Tadic said, in his victory speech, praising Nikolic for "the number of votes he has won."

Nikolic, the pro-Russian challenger, said he congratulated Tadic on his victory and added he would "continue to be his tough opposition."

The race pitted Tadic against extremist Nikolic, only days before an expected declaration of independence by the Balkan state's breakaway Kosovo province.

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The vote confirmed what was predicted to be one of the tightest ever in Serbia and the most important since Milosevic lost power in 2000.

An hour before the polls closed Sunday, about 64 per cent of Serbia's 6.7 million voters had cast ballots, election officials said, six percentage points more than at the same time in the first round on Jan. 20 when Nikolic edged Tadic by about five percentage points. Overall turnout two weeks ago was 61 per cent.

The winner of Sunday's runoff may determine whether the pivotal Balkan country would continue on its path of pro-Western reform and closer ties with the European Union, or return to political and economic isolation similar to that in Milosevic's era.

The outcome will also decide how Serbia will react to the expected declaration of independence later this month by its cherished Kosovo province, dominated by pro-independence ethnic Albanians.

Both Tadic and Nikolic oppose Kosovo's independence, but Tadic has ruled out the use of force, and would likely seek to preserve close ties with the EU and the United States even if they recognize Kosovo statehood.

'A matter of life and death'

Upon casting his ballot Sunday, Tadic said he was a "great optimist" that the people would choose to go forward and "not return to isolation.

"Serbia undoubtedly is moving toward full membership in the European Union and a better life."

Voters in Belgrade seemed to agree that the balloting was crucial.

"We have just recovered a little, we must not stop now," says Dusan Andjic, a 40-year-old lawyer who voted for Tadic. "This is really a matter of life and death."

Serbia's presidency is formally a ceremonial post, though it gained in importance and influence under Milosevic's virtually unrivalled rule in the 1990s. Serbia's president names the commander of Serbia's army — a post that gains in importance before likely Kosovo independence.

Nikolic, deputy leader of the ultranationalist Serbian Radical Party, served as a deputy prime minister during Milosevic's 1998-99 war in Kosovo, when NATO bombed Serbia for 78 days to stop his brutal crackdown against the province's separatists.

The province has been run by the United Nations and NATO since the war.

Kosovo's Albanian leaders said they would declare independence days after the Serbian runoff, no matter who wins, and they expect the U.S. and most EU countries to follow up with quick recognition.

Tadic's Democratic Party played a key role in Milosevic's ouster from power in 2000. The soft-spoken party leader first became the president in 2004, by beating Nikolic in a runoff election.