Ljubljana  - Croatia is due to pass a major milestone on its way to European Union membership Friday - but, as foreign diplomats watch in disbelief, a long-running border dispute with its neighbour Slovenia may scupper its ambition.

Croatia and the EU are to declare five chapters of pre-accession negotiations closed and open 10 new chapters on Friday. Zagreb hopes this will put Croatia on track for EU membership in 2010. Slovenia joined the EU in 2004.

But Borut Pahor, Slovenia's prime minister since September, quickly promised to apply the brakes to Croatia's accession unless Croatia bows to Ljubljana's conditions over a border issue. Since the EU operates on a principle of consensus, Slovenia is in a position to use its membership to block Croatia's dreams of membership.

Both countries have accused the other of trying to pull what should be a bilateral issue into the accession talks.

France, which currently holds the EU presidency, has tried to defuse the issue, suggesting that the border dispute remain a separate issue from the accession talks. While praising the initiative, Slovenia has stopped short of agreeing to it outright.

At the core of the issue, is a dispute left over from the former Yugoslavia. Specifically, the two sides are wrangling over where to draw the border in the Bay of Piran.

The bay is wedged between Italy and Croatia and represents Slovenia's only access to the Adriatic Sea. Slovenia would like the border drawn to allow its vessels direct passage to international waters. However, that conflicts with Croatia's stance, which divides the bay evenly between itself and Italy, effectively blocking Slovenia from the high seas.

As if that was not enough, the two former Yugoslav republics are fighting over a speck of land - no more than a few metres - in the area where their joint border meets Hungary.

While French Foreign Minister Bernard Kouchner shrugged at the escalation of the row for a "few kilometres of coast," Slovenian leaders hinted at even more pressure to come.

Opposition leader and former premier Janez Jansa has suggested a referendum be held to give Slovenians a say on Croatia's EU membership. Such a vote would probably go decisively against Zagreb.

Pahor has so far dismissed the referendum as an option, but has noted that 40,000 votes needed to schedule one could be "rapidly collected."

As the situation stands, Slovenian fishermen and tour guides routinely suffer harassment by Croat authorities in the bay, furthering building tensions.

Western diplomats are generally puzzled. They ask why Croatia, with more than 1,000 kilometres of coast and hundreds of islands, is fighting so bitterly over a small stretch of sea with Slovenia, a country with which it has historic, cultural and religious ties.

Both Slovenia and Croatia have been criticized over their handling of the issue, which once had special police forces facing off on the disputed northern border in an almost comical act of hostility.

Indeed, it seems at times that both nations have been touched by Balkan syndrome, which has over the centuries turned neighbours and enemies into bitter, deadly enemies.

Some have speculated that it does not help matters that Slovenia has become much richer and managed to impose itself as a regional role model by joining the EU and NATO ahead of its neighbour, which is nearly twice as large. (dpa)