Serb nationalists burned a Croatian flag Saturday to protest a decision by a U.N. war crimes court overturning guilty verdicts against two Croatian generals, and the prime minister called the decision a blow to reconciliation in the postwar Balkans.

Many in Serbia are furious that appeals judges at the Netherlands-based tribunal on Friday freed Ante Gotovina and Mladen Markac, who had been previously sentenced to lengthy prison terms for killing and expelling Serbs from Croatia during an offensive in 1995.

"This will have serious consequences at reconciliation in the region," Serbia's premier Ivica Dacic said. "How can someone demand that we condemn all crimes if others are allowed not to condemn the crimes against Serbs?"

Croatians, meanwhile, consider the decision proof that they were the victims in the Balkan conflict. The fighting in Croatia was part of the wars that erupted across the Balkans with the breakup of Yugoslavia in the 1990s. The most deadly was in Bosnia, where Serbs battled Muslims and Croats in a four-year struggle that claimed some 100,000 lives.

Hundreds of supporters of the extremist Serbian Radical Party rallied in front of the presidency building in the centre of Belgrade demanding that the government abandon plans to join the 27-nation European Union and cut ties with the court in The Hague, Netherlands.

The crowd carried banners reading "Stop The Hague" and chanted nationalist slogans in support of the party leader, Vojislav Seselj, whose own trial is ongoing at the tribunal for the role in the atrocities against non-Serbs.

"Serbia has done nothing to help its own heroes who are jailed in The Hague," said Radical Party official Nemanja Sarovic.

Later Saturday, a separate protest by another far-right group was held in front of the EU headquarters.

Even liberal Serbs have warned that Friday's ruling created a sense of injustice and could stir nationalist sentiments. Serbia's government has scaled down co-operation with the tribunal, while Serbia's President Tomislav Nikolic said the verdict was political.

Dacic insisted "this verdict was clearly political ... designed to clear Croatia of crimes committed against Serbs."

Serbian media on Friday and Saturday repeatedly carried file footages of tens of thousands of Croatian Serb refugees fleeing in August 1995 in long columns on tractors, cars and carts. Many still have not returned to their homes.

In Croatia, the two generals received state honours and a hero's welcome on Friday, with tens of thousands jubilant people gathering in the capital, Zagreb, to greet them.

The country is also marking a remembrance day this weekend in the eastern town of Vukovar, which was heavily bombed by the Serb-led military in at the start of the Serb-Croat war in 1991.

The war erupted when Croatia declared independence from Serb-led Yugoslavia triggering a rebellion by minority Serbs. About 10,000 people died in the conflict.