The European Union's top diplomat called Tuesday on Kosovo to lift tariffs on goods from Serbia and Bosnia-Herzegovina as tensions rise between the former Serbian territory, and the EU and NATO.

Kosovo last month slapped a 100-percent tax on Serbian imports, apparently in retaliation after its bid to join the international police organization, Interpol, failed amid intense Serb lobbying.

EU foreign policy chief Federica Mogherini said that "it is in the interest of Kosovo to immediately revoke this decision." She urged Pristina to settle its grievances through dialogue.

Kosovo broke away from Serbia in 2008 and unilaterally declared independence. Belgrade doesn't recognize the move, nor do a small group of EU states, like Spain for example that fear that recognition might fuel breakaway tendencies in their own countries.

Mogherini's appeal came as Kosovo's prime minister accused her of mishandling EU-backed talks on normalizing ties with Serbia.

Ramush Haradinaj said the so-called Pristina-Belgrade dialogue led by Mogherini "has not given its expected products."

He said that while Serbia is taking major steps toward the EU integration, Kosovo residents remain "in a ghetto," not enjoying visa-free travel to EU countries even though it claims to have fulfilled the requirements.

A news conference planned between Mogherini and Haradinaj in Brussels on Monday was cancelled without reason. Mogherini said Tuesday it was because "we didn't have any news to give," and she noted that Haradinaj didn't raise her handling of the talks with her.

Haradinaj has said his government will only lift the tariffs once Serbia recognizes Kosovo's independence.

Mogherini, speaking alongside Serbian Prime Minister Ana Brnabic, expressed concerned about a return to conflict and warned that "the alternative to dialogue is very dangerous."

NATO ambassadors, meanwhile, were weighing Tuesday Kosovo's decision to transform its security force into an army.

Belgrade has warned that creating an army in a place it considers Serbian territory could result in an armed intervention.

But Kosovo's parliament on Friday overwhelmingly approved the army's formation in what President Hashim Thaci described as "an irreversible act."

NATO and the EU have criticized the move, and NATO could reduce cooperation with Kosovo security services, although it seems unlikely to cut the number of troops in its own security force there, KFOR.

"There is a long-standing agreement that NATO will have to re-examine our level of engagement with the Kosovo Security Force, should its mandate evolve," spokeswoman Oana Lungescu said in a statement.

She underlined that NATO's KFOR will continue "to ensure a safe and secure environment."

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Llazar Semini reported from Tirana, Albania.