BELGRADE, May 15 (Reuters) Serbia's parliament was expected to vote in a new coalition government before a midnight deadline today, closely watched by the European Union for signs Belgrade was serious about arresting war crimes suspects.

Prime Minister designate Vojislav Kostunica, a moderate nationalist, agreed a coalition with pro-Western President Boris Tadic last Friday, to the relief of the West which feared the fragile democracy would relapse into nationalism.

''Right now the EU is ready to open its arms to Serbia and give us a lot more than it was ready to give in previous years,'' said Goran Svilanovic, a senior official in the Stability Pact for South Eastern Europe and former Serbian foreign minister.

Kostunica is expected to present his cabinet and government programe in the afternoon, with the vote seen taking place in the late evening, but before a midnight constitutional deadline.

The EU had been urging for a coalition since Serbia's inconclusive Jan. 21 election, but hardened its stance last week, when hardliner Tomislav Nikolic was elected parliament speaker.

Brussels was shocked and pushed Kostunica and Tadic to agree a coalition, and replace Nikolic as part of the deal.

The result was a delicate balance: Kostunica is prime minister but Tadic's Democratic Party gets 13 of 25 cabinet posts.

The Democrats and Kostunica's Democratic Party of Serbia will also have joint control of the security services, something Tadic -- and the EU -- insisted on because Kostunica failed to arrest top war crimes fugitive Ratko Mladic during his term.

The EU froze talks on a Stabilisation and Association Agreement, the first step to membership, last year over Mladic, who it says is aided by hardliners in the Serb army and police.

''We are... rather confident the new government's programme and expected decisions can give ground for resumption of SAA talks immediately,'' EU Enlargement Commissioner Olli Rehn said yesterday.

But to sign the SAA agreement, Belgrade had to arrest Mladic and send him to the war crimes tribunal in The Hague, he added.

Apart from reviving the EU talks, Kostunica will also try to fight the imminent independence of the breakaway Kosovo province.

Kosovo has been run by the Unite Nations since NATO bombed in 1999 to oust Serb forces who had killed 10,000 civilians in a two-year war with separatist ethnic Albanian guerrillas.

The United States and most EU states favour independence for Kosovo and want a quick decision. Serbia's ally Russia wants a 'compromise solution', and says it may veto a draft Security Council resolution to make Kosovo independent with international supervision.

REUTERS RJ KN1527