Officials in the new state of Serbia and Montenegro have begun recreating institutions following the demise of its predecessor, Yugoslavia.

This new country is based on a minimum of common interest between Serbia and Montenegro, and we should give it a chance Zoran Djindjic Serbian Prime Minister

The Yugoslav parliament voted itself out of existence on Tuesday, dissolving the remains of the federation which had existed for nearly 74 years.

The name of the state reflects its new make-up - the federation's two remaining republics joined in a looser union.

Yugoslavia lost its other four republics at the time of the bloody wars of independence in the 1990s, as Croatia, Slovenia, Bosnia-Hercegovina and Macedonia broke away.

Under the new arrangement, Serbia and Montenegro have the right to vote for independence in three years' time.

"This is a new beginning, but we should not be euphoric," said Serbian Prime Minister Zoran Djindjic after the vote.

"This new country is based on a minimum of common interest between Serbia and Montenegro, and we should give it a chance."

Nostalgia

The BBC's Alix Kroeger in Belgrade said there was little sense of regret for the loss of Yugoslavia in its latter-day form.

YUGOSLAVIA'S RISE AND FALL

1918 - Kingdom of Serbs, Croats and Slovenes is created 1929 - kingdom is renamed Yugoslavia 1945 - becomes communist state under Tito 1990s - four states break away 2003 - Yugoslavia vanishes, rump state becomes Serbia and Montenegro

But she adds, there was much more nostalgia for the old, multi-ethnic Yugoslavia - which broke up more than a decade ago.

The forerunner of Yugoslavia was founded after World War I as the Kingdom of Serbs, Croats and Slovenes, becoming Yugoslavia in 1929.

The federal socialist state was born after World War II under the communist rule of Marshal Josip Tito.

But as communism unravelled across Europe, Yugoslavia's republics began to break away.

Montenegro had been moving towards independence when the European Union applied diplomatic pressure to stop it in its tracks.

Compromise

Correspondents say the EU-brokered deal has satisfied neither those who wanted to preserve the federation nor those who wanted the two republics to go their separate ways.

The name Serbia and Montenegro is criticised for being unimaginative, and being difficult to chant at sporting fixtures.

Under the new constitution, a small joint administration will be responsible for defence, foreign affairs, international economic relations and human rights.

All other every-day matters will be run separately in the two capitals, Belgrade and Podgorica.

	:	Yugoslavia ends
Voices from Belgrade

Belgrade will technically remain the federation's capital, although some joint functions will be based in Montenegro.

Breathing space

Both republics can hold referendums on full independence in three years.

UNION DEAL

Common foreign, defence, trade and human rights policy Separate parliaments plus central parliament Weak central presidency Separate currencies Belgrade remains capital Right to secede after three years

BBC south-east Europe correspondent Gabriel Partos says the international community is keen to prevent Serbia and Montenegro separating because this could encourage other communities in the Balkans to split apart.

He says that few expect the new union to last much more than three years, but that this will be a valuable breathing space in which the region will have become more stable.

Although the new state will have a titular president, the last Yugoslav President, Vojislav Kostunica, has been seeking re-election as Serbian president.

Serbia is by far the bigger partner in the new federation. Its population of 10 million dwarfs the 650,000 population of Montenegro.