By Matthew Price BBC correspondent in Belgrade

Serbia says it will hold a presidential election on 29 September, paving the way for current President Milan Milutinovic, who has been indicted for war crimes, to be extradited to the international tribunal in The Hague.

At a session of the Serbian parliament on Thursday, the Speaker announced that elections would take place a few months before President Milutinovic's mandate officially ends in December.

This is normal, as the handover of power is due to take place at the end of the year.

Once that happens, the obstacle that was blocking the president's extradition to The Hague will be removed.

Kostunica hasn't ruled out running

A former ally of Slobodan Milosevic, he has been indicted by the UN War Crimes Tribunal in connection with incidents during the conflict in Kosovo.

His transferral to The Hague had been blocked by Belgrade, who said such a move would not take place while he was still in power.

The list of candidates for the post of president must be finalised by the end of this month.

Power struggle

The election is likely to rejuvenate the intense power struggle between the Serbian Prime Minister, Zoran Djindjic, and the President of Yugoslavia, Vojislav Kostunica.

President Kostunica has refused to rule out running for the Serbian post and it is possible he will put forward his candidacy.

Already Mr Djindjic has indicated his support for economist Miroljub Labus, who would run as an independent candidate.

While President Kostunica has not yet formally declared his bid for the Serbian leadership, predictions that he may are based on the fact that later this year his current job will cease to exist.

Negotiations are underway that will see an end to the Yugoslav Federation.

It and all the posts associated with it will be transferred over to a new union called Serbia and Montenegro.

Mr Kostunica may be waiting to see which of the two presidents - that of the union or that of Serbia - will be the more powerful, before declaring which post he will run for.