(Adds U.N. Security Council)

By Douglas Hamilton

PRISTINA, Serbia, Feb 17 (Reuters) - Kosovo Albanians declared independence on Sunday, confidently awaiting Western recognition for their state despite the anger its secession provoked in Serbia and Russia's warnings of fresh Balkan unrest.

Serbia vowed undying but peaceful resistance to the loss of its cherished southern province. Mass protests were being organised for the coming days.

Protesters called "hooligans" by Serb media attacked the U.S. embassy in Belgrade, where riot police drove them back. Three hand-grenades were tossed in the Serb-dominated north of Kosovo, one of them exploding in a U.N. car park.

By Balkan standards, it was a relatively peaceful start to the latest drama in the tortuous break-up of Serb-dominated Yugoslavia that began nearly two decades ago. But the diplomatic repercussions were just beginning.

The U.N. Security Council met in emergency session at the request of Serbian ally Russia, but it reached no agreement on what to do about Kosovo and did nothing to change Western backing for secession.

"We, the democratically elected leaders of our people, hereby declare Kosovo to be an independent and sovereign state. This declaration reflects the will of our people," said Kosovo's Prime Minister Hashim Thaci.

1,000 YEARS

The former guerrilla commander fought the forces of late Serb leader Slobodan Milosevic in a 1998-99 war which claimed about 10,000 civilian lives, the climax of a ruinous decade of Serbian ultra-nationalism and war that ended with NATO intervention.

Serb police crushed the Kosovo Albanians' first declaration of independence in 1990. But on Sunday, there was nothing Serbia could do to prevent the move, which has the backing of major European Union powers and the United States.

Adoption of the independence declaration in Kosovo's parliament went swiftly with all 109 deputies present voting in favour by a show of hands.

A new flag, with the outline of Kosovo in yellow on a blue background under six stars, was lofted into the cheering assembly.

Albanians partied in the snow-swept streets of the capital, Pristina, and neighbouring Albania threw a huge street party in Tirana.

"We feel the end of Serbia in Kosovo," said one Kosovo man. "I can't believe I'm alive to see this day," said another.

Serbs vow never to surrender Kosovo, steeped in 1,000 years of history and dotted with ancient Orthodox monasteries.

In a speech to the nation minutes after Kosovo voted, nationalist Prime Minister Vojislav Kostunica branded it "a false state", the brainchild of Washington and its readiness to "violate the international order for its own military interests".

Serbia's pro-EU president, Boris Tadic, avoided attacking the West for backing Kosovo's independence. Serbs may be called on to decide which policy they prefer in a snap election that could come soon.

LAST CHAPTER?

While Russia's opposition will prevent if from endorsing an EU mission about to take over supervi

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