Kosovo's parliament has officially declared independence from Serbia.
The declaration of independence was approved on Sunday in Pristina, where Prime Minister Hashim Thaci said Kosovo from this day forward would be "proud, independent and free." He also warned against intimidation or discrimination.
Tens of thousands of ethnic Albanians, many waving Albanian and US flags, celebrated in the streets outside parliament as Mr. Thaci read the declaration to lawmakers.
President Bush said before the official declaration that he was encouraged by the Pristina government's expressed willingness to maintain peace and to support minority Serbian rights in Kosovo.
In Belgrade, Serbian Prime Minister Vojislav Kostunica used a nationally televised address to call Kosovo a "false state." He said independence for the territory violates international order.
Serbia and its traditional ally Russia have argued that Kosovo's independence could spark secessionist movements elsewhere in Europe.
Kosovo has been under United Nations' administration since 1999, when NATO air strikes drove Serb forces from the embattled province, where the majority of people are ethnic Albanians.