Kosovo Prime Minister Avdullah Hoti and Serbian President Aleksandar Vucic are scheduled to sign the pact at 11:00 am (1500 GMT) with Trump in attendance after a day of negotiations in Washington on Thursday, according to the White House.

The agreement is expected to be limited to the normalization of some economic ties, including possibly opening up road, rail and air links between the former Balkan war foes.

Although the European Union has been trying without success for nearly a decade to thaw a bitter relationship between Serbia and its former territory, which declared independence in 2008, an effort focused on business and commerce was launched more recently by US officials.

But Serbia made clear during the talks that they would not go as far as recognizing Kosovo as a fully-fledged state.

White House National Security Advisor Robert O'Brien said late Thursday that the two sides had "made real progress today."

"Economic normalization means jobs for young people," he said.

Hoti said Thursday they had made "great progress" on improving economic cooperation.

Vucic insisted that he would not accept anything that included recognizing Kosovo.

"We thought it should not be in a document about economic normalization, that we couldn't accept it. People from the Trump cabinet listened (to) what we had to say, they were fair and I believe that in other documents that article is no longer there," he said.

The two countries remain bitter over a bloody war fought two decades ago, in which 13,000 died.