The European Union and Bosnia have initialled a pre-membership agreement, starting a process that could lead to the country joining the EU.
The EU's Olli Rehn (left) and Bosnian PM Spiric initialled the text
EU Enlargement Commissioner Olli Rehn said that, in terms of European integration, Bosnia should and would become master of its own destiny.
The Bosnian Prime Minister, Nikola Spiric, spoke of an historic opportunity which should not be missed.
The ceremony in Sarajevo went ahead after a deal on Bosnian police reform.
The change, which involves merging Bosnia's ethnically divided police forces, was set as a condition by the EU before the long membership process could begin.
Bosnia's two separate parts, the Muslim-Croat Federation and the Serb Republika Srpska, have their own police forces as well as governments and parliaments.
The EU's foreign policy chief, Javier Solana, was due to attend the ceremony, but his plane was diverted to Croatia because of poor weather.
EU troops in Bosnia took over from Nato in 2004
The highest international envoy to Bosnia, Miroslav Lajcak, said "the initialling may sound technical, but it's of great symbolic importance, after months of political paralysis".
The agreement will only be complete when Bosnia implements the plan to unite the two police forces but Bosnian leaders hope that a full signing can take place in mid-2008.
Last week, Serb, Muslim (Bosniak) and Croat leaders averted a constitutional crisis after agreeing on new voting rules aimed at strengthening the central government in Bosnia-Hercegovina.
Bosnia's two entities were put in place after the devastating war of 1992-1995, which led to the greatest loss of civilian lives in Europe since World War II.