Thousands of Croats in the town of Knin have celebrated the 10th anniversary of a Croatian offensive which crushed a breakaway Serb republic in the region.
Croats in Knin watched a parade in a surge of patriotism
Croatian Prime Minister Ivo Sanader, attending a military parade, said the Operation Storm offensive in 1995 was magnificent and liberating.
But Serbian Foreign Minister Vuk Draskovic said the anniversary was tragic and should not be celebrated.
Two hundred thousand Serbs were driven from the Krajina region in 1995.
Croat General Ante Gotovina is wanted by The Hague for alleged war crimes during Operation Storm.
The speaker of the Croatian parliament, Vladimir Seks, described the operation as a "luminous victory" for the Croatian army.
"Today, with pride and dignity, Croatia marks the day of victory and homeland thanksgiving day," he said.
"Today we mark the 10th anniversary of Storm, the mother of all battles, the final and the last battle of the Homeland War, the last battle and, let us hope, the last armed battle in Croatia in both the past and the future."
The BBC's Matt Prodger in Belgrade says Operation Storm proved to be controversial.
On the one hand it enabled Croat refugees forced out by the Serbs to return to their homes, but it also resulted in the Serb exodus into neighbouring Bosnia and Serbia, as well as murders of Serbs who remained behind.
In a conciliatory gesture, Croatian President Stipe Mesic on Friday asked for forgiveness from those wronged in the name of his country.
On Thursday, several hundred Serbs attended a ceremony at a Belgrade church to remember those who died in the Krajina exodus.
Relatives of the dead and missing also staged a silent protest outside the Croatian embassy.
Serbian Prime Minister Vojislav Kostunica has described Operation Storm as the biggest example of ethnic cleansing since World War II.
But Croatia says there is no comparison with the genocide of 8,000 Muslims by Serbs at Srebrenica in the same year.