* Law part of EU-brokered thaw with Serbia

* West hails "critical step" towards integration

By Fatos Bytyci

PRISTINA, July 11 (Reuters) - Kosovo adopted an amnesty on Thursday for minority Serbs who previously rebelled against the government, a significant step in settling relations with former master Serbia so both can move closer to the European Union.

The law pardons local Serbs who agitated against the authority of Kosovo's government after the majority-Albanian territory declared independence from Serbia in 2008.

It is an important component of an EU-brokered deal between Kosovo and Serbia, signed in April, that opened the door to EU accession talks for Belgrade and allows Pristina to extend its authority to a northern, Serb-populated pocket of Kosovo for the first time since a 1998-99 war.

"In a fragile democracy, such as the one in which we live, laws aim to change reality for good," Kosovo's deputy prime minister, Hajredin Kuci, told lawmakers before the vote.

Ninety of parliament's 120 deputies voted in favour. Only the opposition Vetevendosje (Self-determination) party opposed the bill.

The law pardons offences including armed rebellion, espionage, inciting national, racial, religious or ethnic hatred, arson, illegal possession of weapons and endangering the territorial integrity of Kosovo.

Some 50,000 Serbs in northern Kosovo have long rejected the authority of Pristina, its government, laws and courts. They have lived in a legal limbo since the war, their enclave operating de facto as part of the Serbian state.

Armed Serbs burned down border posts after Kosovo's declaration of independence and erected barricades to cement the partition.

Under the April accord, the north will be integrated into the Kosovo legal system, though implementation is fraught with risks in a region bristling with weapons and deep animosity.

Serbia hopes it will be enough to clinch the start of EU accession talks in January 2014.

Kosovo's Western backers urged the adoption of the amnesty this week as a "critical step" in integrating all of Kosovo's 1.7 million people.

Serbia lost control over its southern province in 1999, when NATO bombed for 11 weeks to halt the killing and expulsion of ethnic Albanians by Serbian forces trying to crush a guerrilla insurgency.

Kosovo has been recognised by 100 countries, including the United States and 23 of the EU's 28 members. (Editing by Matt Robinson and Raissa Kasolowsky)

Our Standards: The Thomson Reuters Trust Principles.