Berlin - Croatian Prime Minister Ivo Sanader said Wednesday that he would hold fresh talks with Slovenia later this month in a bid to resolve the border dispute between the two neighbours.

The meeting would be with Slovenian Prime Minister Borut Pahor, Sanader told a news conference after talks with German Chancellor Angela Merkel in Berlin.

The two leaders met recently but failed to achieve a breakthrough on the border issue, which dates back to 1991 when the two republics declared independence from Yugoslavia.

The dispute has threatened to stall Croatia's efforts to become the 28th member of the European Union.

Sanader has so far failed to accept demarcation talks headed by Finland's former president Martti Ahtisaari, who mediated in the Kosovo dispute. EU member Slovenia favours such mediation.

Merkel said it was vital for both sides to come to an arrangement quickly.

Germany was ready to help resolve the dispute, the chancellor said, but warned that "the key players to a solution" are in the two countries themselves.

Both leaders welcomed a proposal put forward by Italian Foreign Minister Franco Frattini for completion of the EU accession process with Croatia by the end of next year.

The proposal, made at the EU-US summit in Prague on April 5, is part of a wider initiative to stabilize the Western Balkans. (dpa)