Serbian President Boris Tadic has declared victory in Sunday's parliamentary elections.

He made the announcement after an independent monitoring group carried out a parallel vote count nationwide and said his Democratic Party won 39 percent, about 10 percent more than the oppositional Serbian Radical Party.

"Thank you people, it's a great victory but this is not the end. We have to form the government right away and then we are going to be the winners.

But Tadic also acknowledged his nationalist rivals could still team up against his Coalition for a European Serbia and try to form Serbia's next government.

Any alliance that can muster a simple 126-seat majority in the 250-seat parliament can govern, and nationalists indicated they would mount a challenge.

Serbian Radical Party leader Tomislav Nikolic:

"There is a great chance for a coalition government which will not include Democratic Party. I want to tell the citizens that they have right to celebrate the winning of the majority of votes of their parties, but Boris Tadic does not have the right to transfer that celebration into the celebration of those who will form the government. The government will be formed, but 126 members of the Serbian parliament will have to vote for that government."

Meanwhile, Prime Minister Vojislav Kostunica said that his differences with Tadic's coalition were "insurmountable," and that he was open to talks with the Radicals.

"From tomorrow my party will take part in difficult negotiations for the formation of the new Serbian government. It's too early to say anything specific but I hope that we will be one of the main players in the formation of the new government."

Upon Sunday's victory, Boris Tadic said he saw the outcome as a mandate to take the Serbia into the European Union.