UPDATE 1-Discussions between Serbia and Kosovo to resume Sunday - French presidential source

(Updates with details, quotes)

By Elizabeth Pineau and Dominique Vidalon

PARIS, July 10 (Reuters) - Discussions between Serbia and Kosovo will resume on Sunday via video conference, a French presidential source said on Friday, as the European Union seeks to revive Balkan peace efforts after a U.S.-mediated initiative ended abruptly in June.

German Chancellor Angela Merkel and French President Emmanuel Macron hosted Serbia President Aleksandar Vucic and Kosovo's prime minister, Avdullah Hoti, on Friday to break the deadlock over one of Europe's trickiest territorial disputes.

"France and Germany together obtained this morning from President Vucic and Prime Minister Avdullah Hoti that they resume normalisation talks from Sunday in video conference and on Thursday in person in Brussels," the source said.

Kosovo declared independence from Serbia in 1999 after a NATO-led bombing campaign to curtail ethnic warfare. Serbia does not recognise Kosovo's independence, a precondition for Belgrade's future membership of the EU.

EU foreign policy chief Josep Borrell and Miroslav Lajcak, the EU Special Representative for the Belgrade-Pristina Dialogue, will lead talks on Sunday, before the physical meeting with Macron, Merkel and possibly other leaders on Thursday.

A U.S.-led initiative in late June aimed to bring Vucic and Kosovo President Hashim Thaci to the White House, mediated by Richard Grenell, a special envoy for Trump, but Thaci has been indicted on war crimes charges that he is alleged to have committed during the 1998-99 Kosovo war.

Thaci has denied the accusations. (Writing by Robin Emmott, Editing by Timothy Heritage)