"We want our relations to be as good as possible, therefore we have to solve the remaining outstanding issues, notably the issue of missing persons who are still being sought by both countries," Mesic said, adding that another outstanding issue was the return of refugees.
"By enabling return, Croatia is showing that it is a democracy with functioning institutions, where all are equal before the law," Mesic said.
The two presidents praised the ever-improving economic cooperation, with an increasing number of Croatian companies entering partnerships in Serbia. The situation in Croatia is slightly more difficult in that regard, Mesic said, adding that he hoped that Tadic's visit would contribute to increasing the presence of Serbian companies in Croatia.
Mesic said that he and Tadic had agreed about the need to individualise guilt for concrete crimes and put an end to the stigmatisation of entire peoples.
Also discussed was the fight against terrorism and Croatia's and Serbia's European aspirations.
"We want open borders, because we will understand the importance of national minorities as bridges of cooperation once we join the EU," Mesic said.
The future of the region lies in united Europe, which cannot be complete without all countries in its southeast parts, Mesic said.
"The truth is that Europe is tired of association, but we are more tired of transition. They have to help us complete transition as soon as possible, and we have to help them by adopting European standards as soon as possible," Mesic said.
Serbian President Boris Tadic described his meeting with President Mesic as very constructive and open, adding that they were in agreement regarding the common goal of the two countries - EU membership.
"That goal is not of a formal character, the point is for our two societies to change for the better and become more similar to the societies in the EU," he said.
The Serbian president, who earlier in the morning met representatives of the Serb minority before meeting Mesic, advocated fair treatment of Croats in Serbia and Serbs in Croatia. "They cannot be held hostage to our policies, they have to be envoys of our two peoples and loyal citizens of the countries where they live".
Tadic went on to say that it was in Serbia's and Croatia's interest to individualise guilt and bring to justice all who committed war crimes and were in the territory of the two countries.
"The return of refugees is not proceeding quite well. Some effort has been invested and improvement is there, which I respect, but it is not good enough," Tadic said, adding that he expected Croatia to make additional efforts in the future to enable Serb refugees to return to their homes in Croatia and continue living as loyal citizens.
"In that regard, I wholeheartedly support Croatia's integration with Euro-Atlantic structures. It is in Serbia's interest to see Croatia become an EU member as soon as possible, so that it could open the door to the EU also to other countries in the region," the Serbian president said.
He said that the opening of borders and a less strict visa regime was in the interest of both countries and announced that Serbia would withdraw its army from the border with Croatia.
Tadic said that the purpose of his tour of the region was to send a message to the countries in the region to realise their common goal, remove obstacles on the path to the EU, and cooperate in "de-Balkanising" the Balkans.
He cited as an example cooperation between business people in the region.
Mesic and Tadic were also due to visit the southern town of Knin and meet members of the town government and local Serbs.