Croatian Prime Minister Ivica Racan has said he is confident a solution can be found to the dispute with the International Criminal Tribunal for the former Yugoslavia (ICTY).
The tribunal in The Hague has indicted a retired general on war crimes charges.
Mr Racan said Croatia was working with the tribunal to find a solution which satisfied all parties, including the general, Janko Bobetko.
The European Union has urged Croatia to hand over the indicted general and says it risks delaying closer ties with the EU if it does not cooperate fully with the tribunal.
Last week Croatia challenged the indictment of the 83-year-old general, who - it says - is too ill to travel.
General Bobetko has been accused of crimes against humanity, but has vowed never to surrender to the court.
Many Croats see him as a war hero from the Balkans conflict in the 1990s.
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