By Benet Koleka and Kole Casule

TIRANA/SKOPJE, Feb 17 (Reuters) - Albanians across the Balkans celebrated Kosovo's independence on Sunday as the sign of a better future for a people scattered across several countries.

Even before the parliament of the Albanian-majority province formally declared independence from Serbia, thousands of people took to the streets in the Albanian capital Tirana, waving flags and celebrating with bands and dancers in folk costumes.

"I bought a flag to put on the grave of my father who wished all his life to see this day," said Gjylhan Hyka Ahmeti, whose family hails from the Kosovan town of Djakovica.

Albanian Prime Minister Sali Berisha, born near Albania's mountainous eastern border with Kosovo, said it was the "most beautiful day" of his life.

"The Balkans today is freer than ever," he told Reuters Television, saying independence "ushers in a new era of nations working for a better future in peace and cooperation". Albanians say they are descended from ancient Illyrians, one of the original peoples of the Balkans. Their distinct culture is based on a code of honour and strong clan and family ties.

Their language is completely unrelated to its Greek and Slav neighbours. Most are very liberal Muslims, but a strong minority is Christian, like the late Mother Teresa, a beloved figure.

In Macedonia, where Albanians make up a quarter of the population, thousands gathered to celebrate in the Tetovo region and in the capital Skopje. Crowds blocked streets in the city, singing and waving the red-and-black Albanian flag.

Volleys of gunfire were heard in Skopje -- a long-standing Balkan custom in times of celebration.

"This is a great day for all Albanians, wherever they live," said Musaref Bislimi, mayor of Aracinovo, a village near Skopje that saw heavy fighting during an ethnic Albanian insurgency in 2001.

Fears mounted during that period that Albanians were gearing up for a fight to unite Kosovo with other Albanian areas in Macedonia, Montenegro and Albania proper into "Greater Albania".

The six-month uprising in Macedonia came close to igniting full-scale civil war before NATO and the EU brokered a peace accord offering the Albanian minority greater rights.

In Montenegro, where Albanians account for 7 percent of the 600,000 population, people watched the declaration from Kosovo live on television in cafes and betting shops.

Celebrations in ethnic Albanian areas in southern Serbia were less raucous, reflecting the unease in an area where Albanian guerrillas took up arms in 2000-01 but which remains part of Serbia. Albanians there still seek union with Kosovo.

Western mediation brought that uprising to an end.

"This is a victory for all Albanians," local ex-rebel leader Jonuz Musliu told Reuters. "We also played a small part in it."

One Albanian resident of the south Serbian town of Presevo said everyone there had headed for Kosovo.

"They're giving out everything free of charge there, in all the restaurants and pubs," Nexhad Beluli told Serbia's Tanjug news agency. (additional reporting by Shaban Buza; Writing by Ellie Tzortzi, editing by Matt Robinson and Richard Meares)

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