Cavic said the agreement was concluded not only for the sake of stabilising relations between the Bosnian Serb entity and Serbia, but also for the sake of stabilising the situation in the region.
Tadic said the document was signed in new circumstances after Serbia had become a member of the Organisation of the United Nations, which was why it was necessary to redefine its relations with the RS.
"I support all integration processes in the area of the former Yugoslavia, and this agreement means that Serbia recognises the territorial integrity and sovereignty of Bosnia-Herzegovina. At the same time, this agreement is in compliance with the international law and the Dayton peace accords," the Serbian President said, adding that in the coming period "more investments by Serbian companies into the RS and the entire Bosnia-Herzegovina can be expected to the mutual satisfaction".
Serbian PM Kostunica said that the Serb entity in Bosnia and Serbia "are oriented towards the enhancement of regional cooperation".
According to Kostunica, the document signed today in Banja Luka bears witness to "the Serbian Government's firm commitment to the international law".
His Bosnian Serb counterpart Milorad Dodik said that the agreement on special and parallel relations "confirms commitment to the Dayton (peace accords)".
Dodik also said that the treaty would promote all possibilities of the Dayton accords and help "establish new political practice between the countries and the entities".
Also today in Banja Luka, a branch office of the Komercijalna Banka Srbije (Serbian Commercial Bank) was opened and about 300 Serbian business people arrived for talks with their colleagues in this city.
The agreement on special ties between Belgrade and Banja Luka is likely to elicit various reactions in the region.
The Serbian Minister of Foreign Affairs, Vuk Draskovic, has said that the deal will not undermine Serbian relations with Bosnia-Herzegovina.
"Special relations between the RS and Serbia cannot be detrimental to relations with the state of Bosnia-Herzegovina, as the RS is part of that country," Draskovic was quoted by the Belgrade-based Beta news agency as saying on Tuesday.
In a bid to downplay the importance of the agreement, Draskovic said that it was not the first time that such an agreement was signed with the Republic of Srpska and that "this is always done ahead of an election".
He was referring to the general elections in Bosnia, scheduled for 1 October, and to elections in Serbia which are likely to be held before 2007.
Croatian President Stjepan Mesic, on the other hand, has assessed that the Banja Luka agreement could have negative long-term consequences for the stability of not only Bosnia-Herzegovina but also of the entire region.
According to a statement Mesic issued on this occasion, Croatia has always emphasised that it is its vital interest to see Bosnia-Herzegovina arranged as a single state functioning in line with the basic principles of democracy and the rule of law.
"We have many times warned that the entities in Bosnia-Herzegovina (the Republic of Srpska and the Croat-Muslim entity) are not states, and it is unacceptable for them to behave as states or para-states".
"Special relations agreements between neighbouring countries and the entities in Bosnia-Herzegovina are formally in line with the letter of the Dayton accords, but they are not in the least in accordance with the spirit of the time in which we live," the Croatian president said.
"Being aware of the need to strengthen Bosnia-Herzegovina as a single state in which all the three constituent peoples (Serbs, Croats and Bosnian Muslims) will be equal throughout the country, the Republic of Croatia has never concluded any agreement on special relations with the Federation of Bosnia-Herzegovina (the Croat-Muslim entity)," Mesic noted.
Mesic went on to say that agreements on special relations should be concluded with Bosnia-Herzegovina as a sovereign and internationally recognised country, while the entities are a matter of the country's internal structure.
Today it is crystal clear that the Dayton accords put an end to the war in Bosnia-Herzegovina, but it did not lay the foundations for a lasting and stable peace. The special relations agreement between the Republic of Srpska and Serbia will push Bosnia as well as the entire region further away from the aim of establishing a lasting and stable peace in the former Yugoslavia, which can generate unfavourable consequences for the process of normalisation of relations between Croatia and Serbia, Mesic said in the statement.