(Adds Contact Group)

By Matt Robinson

PRISTINA, Serbia, Feb 11 (Reuters) - Kosovo Albanian leaders appealed for calm on Sunday after two people died in clashes between police and Albanians protesting against a U.N. plan they say falls short of full independence from Serbia.

Two other protesters were in a serious condition after Saturday's violence in which U.N. and Kosovo police used teargas and rubber bullets against Albanians trying to break through barricades around the parliament in Pristina.

The violence underscored Western fears of mass unrest if a decision on the Albanian majority's demand for a Kosovo state does not come soon. It drew a warning from the six-power Contact Group steering Balkan policy that the world was watching.

Kosovo President Fatmir Sejdiu, Prime Minister Agim Ceku and opposition leaders issued a joint statement condemning the protests, which had brought 3,000 people onto the streets of the capital before turning violent.

"I assure the Kosovo people that the process is going in the right direction and very soon Kosovo will be independent," Ceku said separately. "These acts are only damaging the process."

The deaths suggested police had used "excessive force", he said. Police announced an independent investigation.

A U.N. plan unveiled this month by former Finnish president Martti Ahtisaari would, if adopted by the U.N. Security Council, set Kosovo on the path to statehood, eight years after NATO bombs drove out Serb forces and the United Nations took control.

Kosovo leaders have accepted the blueprint, which provides for a powerful European overseer, and self-government and protections for the 100,000 Serbs. But some among the 90-percent Albanian majority complain it will prolong Kosovo's limbo status and leave Serbia with a permanent foothold.

"DEFENSIVE MEASURES"

"Those who resort to violence and provocation only damage their own cause in the eyes of world opinion," the Contact Group -- the United States, Britain, Germany, France, Italy and Russia -- said in a statement.

The protesters had called for an independence referendum and rejected talks with Serbia, which in 1998-99 killed 10,000 Albanians and expelled 800,000 in a war with guerrillas.

Police confirmed the deaths of two men overnight, aged 30 and 34. Another protester was in serious condition at a military hospital run by the 16,500-strong NATO peace force.

Around 100 members of the movement which organised the demonstration lit candles on Sunday evening on Pristina's Mother Theresa Street. Police had arrested at least 15 people by Sunday, including protest leader Albin Kurti.

The violence was the worst since March 2004, when 19 people died in Albanian mob riots against Serbs. Western powers said then that Kosovo's uncertain status had become unsustainable.

Serbia opposes the amputation of its medieval heartland, but the Albanians living there reject any return to Serb rule.

The United States and the European Union have backed Ahtisaari's blueprint, drafted after months of shuttle diplomacy and fruitless Serb-Albanian talks in 2006.

But Russian President Vladimir Putin repeated on Saturday that Moscow would only support a solution acceptable to both sides -- something Ahtisaari says is virtually impossible.

Final Serb-Albanian talks are due to begin on Feb. 21 in Vienna. Ahtisaari hopes to present the plan to the U.N. Security Council in March. (Additional reporting by Fatos Bytyci and Shaban Buza)

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