Croatia's top ethnic Serb official has joined a ceremony marking the 25th anniversary of a military victory that ended the country's independence war, setting a rare tone of reconciliation on a day normally charged with tension.

Deputy Prime Minister Boris Milosevic is the first ethnic Serb political representative to attend the annual memorial for "Operation Storm" offensive, in which Croatian troops recaptured territory held by rebel Serbs during the 1991-95 war. 

While Croatia celebrates the day as a victorious moment of liberation, Serbia mourns the hundreds of ethnic Serbs who were killed and the more than 200,000 who fled Croatia in the aftermath.

In Croatia this year, an olive branch was extended as the Serb minister joined other top officials during a wreath-laying ceremony in Knin.

"We mourn all the victims, especially civilians, and not only Croatians, but also Serbs and all the others," Croatia's conservative Prime Minister Andrej Plenkovic said in an address. 

"The legitimate right to defence is not and cannot be an excuse for wrongdoing," he added, calling war crimes committed by Croatian forces an "ugly scar on the just face" of the 1990s war.

Mr Milosevic, whose grandmother was killed in the wake of the offensive, welcomed the "messages of peace and reconciliation".

"I believe that this is the first step," Mr Milosevic, a member of Croatia's main ethnic Serb party, told reporters.

The gesture was symbolic of the Croatian government's pledge to improve still fragile relations with ethnic Serbs, who make up some 4.5% of the country's 4.2 million population.

Yet Mr Milosevic's presence in Knin was met with backlash across the border in Serbia, where pro-government tabloids attacked the Serb politician as "shameless".

"We do not want to celebrate the tragedy of the Serbian people and Serbia will never accept humiliation," Serbian President Aleksandar Vucic said at the country's own memorial service yesterday evening, held on a bridge that was crossed by the hundreds of thousands of Serb refugees who fled Croatia after Operation Storm.

The war was sparked by Croatia's proclamation of independence from Yugoslavia in 1991, which was opposed by Serb rebels.

Politically and militarily backed by Belgrade, the rebels occupied one-third of Croatia's territory, forcing more than 500,000 Croatians and other non-Serbs to flee.

On 4 August 1995, Croatia launched Operation Storm, recapturing the rebel-held lands in an 84-hour offensive.

The assault effectively ended the war that claimed some 20,000 lives.

Hundreds of mostly elderly Serb civilians were killed in the aftermath, while more than 200,000 others fled to Serbia and Bosnia as their property was looted, seized or burned down.

Around half have since returned.

In another symbolic move, Croatia's Defence Minister Tomo Medved has agreed to attend a commemoration later this month in a village where six Serb civilians were killed by Croatian forces after the operation.