The first direct talks between the two sides did not tackle the sensitive issue of Kosovo's final status.
The province's majority ethnic Albanian population of almost two million is demanding independence from Serbia but Belgrade and the province's tiny Serb minority adamantly reject this.
Nevertheless the UN mediator at the talks, Austrian diplomat Albert Rohan, and the two delegations both said the discussions on "practical issues (were) conducted in a very cooperative spirit".
"It was not expected to reach an agreement ... but to present various opinions and explore different views, and it was quite successful," Mr Rohan, who chaired the talks, told reporters after the end of the two-day meeting.
Mr Rohan, a deputy to the UN special envoy for Kosovo, veteran Finnish diplomat Martti Ahtisaari, said the two sides were to meet again on March 17 to discuss other technical issues.
"This method is not earth shattering in a political sense but it is important for the life of people in Kosovo," Mr Rohan said.
Technical issues
The talks in Vienna focused on technical issues such as reforming Kosovo's local government to ensure greater autonomy for minority Serb and other non-Albanian communities, who fear they will be marginalized under a central, ethnic Albanian-dominated government.
The talks centred on the transfer of responsibilities in the fields of health care, education, welfare and culture, while Tuesday the delegations discussed more sensitive topics including justice, police and administration.
Although admitting the "usefulness" of direct talks, both teams have remained firm in their opposing stances on Kosovo's future.
"This was the beginning of a process that will in the end produce the independence of Kosovo," said Lutfi Haziri, Kosovo minister for local self government and head of Pristina's negotiating team.
Mr Haziri said the ethnic Albanians "want to resolve the status (of Kosovo) as soon as possible".
But Leon Kojen, Belgrade team member and advisor to Serbian President Boris Tadic said the "fundamental positions" of the two sides remained "deeply opposed".
"For us, there is no question for Kosovo being outside Serbia's ... sovereignty, while on the other side (in Pristina) there is a burning desire for independence," said Mr Kojen.
The progress made at the Vienna talks -- which were postponed after the death on January 21 of Kosovo president Ibrahim Rugova -- would in time lead to discussions on "more serious issues", said Mr Rohan.
"Theoretically, we could have addressed the status issue but this discussion would end in two hours," he insisted.
The complex negotiations are expected to last at least until the end of this year. Mr Rohan said the goal was to conclude them in 2006 if possible.
Almost seven years after the end of the 1998-99 war between Serbian forces and ethnic Albanian guerrillas, the central government in Belgrade and provincial government in Pristina are still firmly entrenched in rival positions.
Serbia and its people also broadly reject independence for Kosovo because they see the southern territory as the cradle both of their nation and of their Orthodox religion.