The Associated Press summarizes the current situation:
Serbia made clear it would never accept Kosovo's statehood. On Monday, Serbia said it would seek to block Kosovo from gaining diplomatic recognition and membership in the U.N. and other international organizations.
Russian President Vladimir Putin has argued that independence without U.N. approval would set a dangerous precedent for "frozen conflicts" across the former Soviet Union, where separatists in Chechnya and Georgia are agitating for independence.
European Union nations have stood deeply divided over whether to recognize Kosovo's independence as their foreign ministers gathered in Brussels, Belgium, to try to forge a common stance. Britain, France, Germany and Ireland indicated they would push ahead with recognition. But Spain, which has struggled with its own separatist movement in the Basque region, called Kosovo's declaration illegal.
The international community, with the exception of Russia, has strongly pushed Serbia to recognize Kosovo's independence in years of negotiations, but it refused. It has been willing only to grant broad autonomy within Serbia.
Unilateral autonomy is a last resort in diplomacy, because it often leads to war, or barring a hot war, the constant threat of war. Ask Taiwain what can happen. Also, recognizing a unilateral autonomy declaration opens the door for restive regions across the world to follow suit.
Even those nations, such as Spain and Russia, which have declared Kosovo's declaration to be illegal are unlikely to aid Serbia in retaking it militarily, and given Spain's open trade borders with the E.U. many of whose members approve of the split, it seems unlikely that even a trade embargo of Kosovo by Spain or other dissenters is feasible. The U.S., in contrast, is quite likely to use military force to defend Kosovo should Serbia try to retake Kosovo with military force.
In war, probably the single biggest factor in the outcome is who allies with whom.
Kosovars, of course, have no reason to believe that the Serbians, who committed genocide against Bosnian Muslims, will treat them any better, and also have the fresh memories of harsh Serbian rule and destruction of their democratic institutions fresh in their minds. Kosovo has strong ethnic ties with Albania. Strong ties with Albania are certain, and a merger with Albania is not out of the question. Of course, Albania is not exactly the most wonderful nation to have as an ally.
Until the death of Enver Hoxha in 1985, Albania made a point of existing in an aburdly primative state. Since the 1992 rise of post-Communist rule, the nation has been best known in international circles for being buffuddled by pyramid schemes and international car theft rings.
The dismantling of Yugoslavia along ethnic lines continues. Bosnia is the only part of former Yugoslavia that has not balkanized completely. But, the central government that binds the Bosnian Serb Republic and the Muslim-Croat federation (with strong cantonal government) is weak. Indeed, a Bosnian Serb Republican unilateral declaration of independence or declaration of merger with Serbia seems one of the possible piece of fallout from the Kosovo declaration.
The divide in Bosnia is both ethnic and religious:
According to 2000 data from the CIA World Factbook, Bosnia's largest ethnic groups are Bosniaks (48%), Serbs (37.1%) and Croats (14/3%). Likewise, 46% of the population are (Sunni) Muslims, 36% are Orthodox Christians, 14% are Roman Catholics, and 5% are not interested in religion.
There is a strong correlation between ethnic identity and religion in Bosnia and Herzegovina. as is shown by the fact that 95% of Bosniaks are Muslims, 95% of Croats are Catholics whilst 95% of Serbs are Orthodox Christians.
The greatest virtue of the dismantling of Yugoslavia (itself a larger piece of the fall of the Soviet Union, the Austro-Hungarian Empire and the Ottoman Empire) is that it has allowed most of the resulting nations to transition to Western style democracy with fewer political and bureacratic impediments and to distance themselves from the Soviet style communism and dictatorial habits of the former Yugoslav regime.
In the wake of the Yugoslav breakup, Slovenia (independence declared June 25, 1991), Croatia (June 25, 1991), Macedonia (September 8, 1991), Bosnia and Herzegovina (April 6, 1992) (the Muslim-Croat federation part, anyway), Montenegro (June 5, 2006), and Kosovo (February 17, 2008) have emerged as Western allies. Serbia (including the Serb Republic part of Bosnia and Herzegovina and the ethnically similar autonomous region onf Vojvodinia within it) are the only parts that have remained to carry out Yugoslavia bad image.
One former Yugoslava republic is already part of the European Union and others are likely to follow:
The first former Yugoslav republic to join the European Union was Slovenia, which applied in 1996 and became a member in 2004. Croatia applied for membership in 2003, and could join before 2010. Republic of Macedonia applied in 2004, and will probably join by 2010–2015. The remaining three republics have yet to apply so their acceptance generally is not expected before 2015. These states are signatories of various partnership agreements with the European Union. Since January 1, 2007, they have been encircled by member-states of EU.
In 2010, almost of all of Western Christendom in Europe will be united by the European Union which has shown reluctance (with the exception of Greece) of including Orthodox or Muslim countries. Turkey's application for membership has been star crossed, and the historically Orthodox Christian nations of Eastern Europe have also received go slow treatment.
Religiously, Kosovo is an anomoly. It represents perhaps the only time in U.S. history were the United States has decisively taken the side of a Muslim ally vis-a-vis a Christian country (with the exception of the related plight of the Bosnian Mulsims aka Bosniaks).
Kosovo is certainly far more worthy of the honor than Kuwait, which had been wiped off the face of the Earth by an Iraqi invasion before a U.S. led coalition in the first Gulf War restored its sovereignty. Kosovo has a grass roots democracy. Kuwait was and remains a slave holding monarchy, although Kuwait has finally made some marginal political reforms. Kosovo we saved for humanitarian reasons to prevent a genocide (under President Bill Clinton). Kuwait we saved for oil (under the elder President Bush).
Indeed, one of the notable feature of modern geopolitics is that some of the most democratically governed Islamic nations, relatively speaking, such as Kosovo, Palestine, Kurdistan and Afghanistan have been those that are least secure and internationally marginal. Then again, modern Turkey and Indonesia also seem to break from that pattern, and even Iran is considerably more democratic than U.S. allies such as Saudia Arbia, United Arab Empirates, Jordan and Morocco, and is at least as democratic as U.S. ally Pakistan.