PRISTINA (Reuters) - Protesters firing tear gas disrupted the inauguration ceremony on Friday for Kosovo President Hashim Thaci in the midst of a political crisis over an EU-brokered agreement with old adversary Serbia.

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Guests at the open-air event in central Pristina coughed and wiped their eyes as tear gas canisters were set off just before Thaci gave his inaugural speech to a 1,000-strong audience including Croatian President Kolinda Grabar-Kitarovic, Albanian Prime Minister Edi Rama and diplomats.

Police said 12 people were arrested.

The public transfer of power from Thaci’s predecessor Atifete Jahjaga came a day after he took the oath of office in parliament, an event that was also marred by an opposition boycott and protesters throwing stones outside.

The opposition in the majority ethnic Albanian state accuses Thaci of helping clinch an EU-brokered agreement in 2015 that gives a small Serb minority more power over local government decisions and raises the possibility of financing from Belgrade.

Thaci, who led a guerrilla insurgency against Serbian forces in 1998-99, went ahead with his ceremony despite the tear gas, saying he wanted dialogue both with Serbia and domestic critics.

“Kosovo and Serbia should pass from the phase of normalization of their relations to the phase of reconciliation between two countries. We will continue the dialogue with the EU and Serbia,” he said, standing under Kosovo and European Union flags.

“Kosovo does not belong more to one ethnic community and less to another. Kosovo is the homeland of all,” he said.

Kosovo’s biggest opposition party Vetevendosje said its supporters had released the tear gas and vowed not to accept Thaci as president, a largely ceremonial role.

“We will always object to him, without compromise, as we did today,” the party said in a statement.

Opposition parties have protested for six months against the deal with Serbia, staging street rallies, repeatedly setting off tear gas in parliament and clashing with police. In January, protesters set the government building on fire.

Kosovo declared independence in 2008 almost a decade after NATO air strikes drove out Serbian security forces accused of killing and expelling ethnic Albanian civilians during a counter-insurgency war. Kosovo’s independence is now recognized by more than 100 countries, though not by Serbia.

Many Kosovo Albanians believe last year’s accord with Serbia could erode their hard-won sovereignty, though the agreement’s status is now unclear after a Kosovo constitutional court ruling in December that parts of it breach the country’s laws.