Mediators hope a settlement on Kosovo can be reached this year
EU foreign ministers have praised Balkan states seeking membership for reforms they have introduced.
In a statement after talks with their Balkan counterparts, they spoke of progress in the areas of stability, democracy and economic recovery.
Serbia and Montenegro, Croatia, Bosnia and Macedonia had taken significant steps towards their ultimate goal of EU membership, the statement said.
The comments came at a meeting of EU foreign ministers in Austria.
Delegates at the two-day talks in Salzburg have also discussed the Iran nuclear issue and funding of the Palestinian Authority under Hamas.
As news broke that former Yugoslav President Milosevic had been found dead in his cell at the UN war crimes tribunal in The Hague, the EU said his death would not close the chapter on the past.
"This does not change or alter in any way the need to come to terms with the past, with the legacy of which Slobodan Milosevic has been a part," Austrian Foreign Minister Ursula Plassnik told a news conference.
"This will be one of the big challenges ahead for the region in order to reach what is the ultimate goal we are all working on, and this is lasting peace and reconciliation," she said.
'No return of Kosovo'
"All (Western Balkan countries) have in the last year made significant steps along their road towards the EU, with EU membership as ultimate goal," the 25-nation bloc said in a joint statement with the Balkan countries.
However, the EU has told Serbia and Montenegro that talks on closer ties will be put on hold unless it hands over top war crimes suspect Ratko Mladic.
Its future relationship with Kosovo is also a potential obstacle holding up negotiations.
The province is legally part of Serbia, but Belgrade is under pressure to grant it full autonomy.
In February, UN-sponsored talks on the future of Kosovo began in the Austrian capital, Vienna. Diplomats hope the talks may lead to a deal on Kosovo's status this year.
On Friday British Foreign Secretary Jack Straw called on Serbia to accept that independence for Kosovo was almost inevitable.
But Serbia's foreign minister earlier told the BBC he planned to deliver a message to his European counterparts that Serbia could never accept a fully independent Kosovo.
Vuk Draskovic said the result would be a humiliation for Serbia, dangerous for the region and the whole of Europe.
EU Enlargement Commissioner Olli Rehn told the BBC that Belgrade had to take a more realistic approach.
"The starting point of the negotiations is that there is no return of Kosovo to the rule of Belgrade," he said.
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