The Croatian parliament has approved a new government led by Ivo Sanader - the country's first with an ethnic Serb in a key position.
Mr Sanader hopes to lead Croatia into the EU and Nato
Slobodan Uzelac will become vice prime minister in Mr Sanader's cabinet.
Croatia fought a bitter war against the Serb-led Yugoslavia after declaring independence in 1991. Thousands of Serbs fled the violence.
Mr Sanader has vowed to speed up Croatia's bid for membership of the European Union and Nato.
The coalition cabinet is dominated by Mr Sanader's HDZ party which won last year's general elections.
The new government was backed by 82 lawmakers in the 153-member parliament, while 62 voted against.
"We are entering a period during which Croatia, led by this government, will achieve its main strategic goals," Mr Sanader told MPs.
"We want to speed up EU negotiations by quickly meeting all the requirements and adopting European legislation," he said.
Zagreb hopes to join the 27-member bloc by 2010. It also expects to receive an invitation to join Nato this year.
Mr Sanader's HDZ (Croatian Democratic Union) emerged as the largest political party in November's elections.
However, the party failed to win the polls outright and had to negotiate with smaller parties to gain a parliamentary majority.
The opposition Social Democrats have described Mr Sanader's pledges as "just a list of nice wishes".
One of the coalition partners is the Independent Serb Democratic Party (SDSS), whose member Slobodan Uzelac will now become vice prime minister in charge of economic development, reconstruction and the return of refugees.
The rights of ethnic Serbs - who make up nearly 5% of Croatia's 4.4m population - is one of the key criteria for Zagreb's membership in the EU.
Some 280,000 ethnic Serbs fled their homes after the 1991-1995 war, the UN says.
So far about 130,000 have returned home.