(CNN) -- Serbia's ultra-nationalist challenger Tomislav Nikolic will face pro-Western incumbent Boris Tadic in a presidential runoff on February 3, The Associated Press reported on Monday.
Serbian voters are set to head for the polling booths again on February 3 in a presidential runoff.
The state electoral commission said that Radical Party leader Tomislav Nikolic won 39 percent of the first round of voting on Sunday, while Tadic had 35 percent.
Populist Velimir Ilic was in third place with about seven percent, and Socialist Party official Milutin Mrkonjic was next with about six percent.
The pro-Russia Nikolic is expected to pick up the majority of their votes in the runoff, according to analysts.
Tadic -- who also opposes Kosovo's imminent bid for independence from Serbia -- will be counting on the votes that went to liberal leader Cedomir Jovanovic, who placed fifth with about five percent.
CNN's European political editor Robin Oakley believes that the runoff will be a pivotal moment in the Balkan nation's history.
"February 3 therefore becomes a crucial choice not just for Serbians but for many across the Balkans who fear a further decade of instability and economic stagnation," Oakley said.
"The European Union, Russia and the United States, which is backing early Kosovan independence, will all be watching closely."
The biggest issue in the race has been the possible secession of the majority-Albanian province of Kosovo. The territory has been under U.N. administration since the end of the 1999 NATO bombing campaign that halted Milosevic's campaign of "ethnic cleansing" against the Albanians, who make up about 90 percent of Kosovo's 2 million people.
The outcome of the election could determine whether Serbia forges closer ties with the West or drifts further toward Russia.
Both Tadic, who was elected in 2004, and Nikolic -- an ally of the late Yugoslav strongman Slobodan Milosevic -- oppose independence.
But Tadic is a western-leaning leader who has pushed for Serbia to join the European Union, while Nikolic supports closer ties with a resurgent Russia, the Serbs' historical ally.
Edward Joseph, an analyst at the Johns Hopkins University School of Advanced International Studies in Washington, said the election has Serbia balanced "on a knife's edge."
"There is a clear choice there, and Nikolic's election would indeed be a setback for Serbia and increase its isolation," Joseph told CNN. The estimated turnout of 61 percent "shows the intensity of the division in Serbia and the intensity of the concern about this election," he said.
Serb nationalists see Kosovo as the cradle of their civilization and see its independence as the dismemberment of their country. Tadic and Prime Minister Vojislav Kostunica have criticized the United States and leading European Union powers that back its secession, which Russia opposes.
But, while losing Kosovo would be "deeply painful for all Serbs," many realize that Kosovo "is overwhelmingly Albanian, and it is lost and its independence is inevitable," Joseph said.
Nikolic was a supporter of Milosevic, who presided over the breakup of Yugoslavia and the decade of nationalist "ethnic cleansing" that followed. Milosevic was forced from office about a year after the Kosovo campaign and died in 2006 while awaiting trial for war crimes before a U.N. tribunal.
Nikolic served briefly with a notorious Serb paramilitary during the war that followed Croatia's secession from Yugoslavia in 1991.
The leader of his Serb Radical Party, Vojislav Seselj, is currently awaiting trial before the same tribunal that Milosevic faced. E-mail to a friend
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