By Aleksandar Vasovic
BELGRADE (Reuters) - Serbia and Croatia, ex-Yugoslav neighbors and wartime foes from the 1990s, traded protests on Tuesday over a Croatian move to rehabilitate a World War Two Catholic cleric whom Serbia still views as a war criminal.
The two Balkan powers now have even diplomatic ties, but the row over Alojzije Stepinac threatened to re-awaken regional tensions which lie below the surface.
Stepinac, an archbishop and cardinal, was jailed in 1946 by the then Yugoslav Communist regime for collaborating with Italian and Nazi German occupiers and the Nazi-allied Ustasha regime of the Independent State of Croatia (NDH).
In 1997 he was beatified by the Catholic Church and declared a martyr by Pope John Paul II in 1998.
Last week, a court in Croatia, a European Union member, annulled the verdict against Stepinac, who died in 1960, arguing that the 1946 trial had violated the principles of criminal law.
Around 1.2 million people, including 580,000 civilians were killed in Yugoslavia during World War Two, most of them by Nazi-allied forces.
The World War Two grievances played a key role in the fomenting of conflicts in 1990s and regional tensions still persist.
Top officials in Serbia, a EU candidate, including President Tomislav Nikolic and Prime Minister-designate Aleksandar Vucic criticized the ruling, saying Stepinac played a pivotal role in the killing of hundreds of thousands of Serbs, Jews, Gypsies and anti-fascists between 1941 and 1945.
On Tuesday, Croatia's center-right outgoing government sent a protest note to Belgrade saying such a rhetoric fueled intolerance between the two nations.
"Such rhetoric ... was distancing Serbia from endorsing European value and its accession to the European family," the Croatian foreign ministry said in the note carried by the Hina news agency.
Rehabilitation of World War Two anti communists and Quisling leaders in former Yugoslav republics started after the collapse of the then federal state as newly independent countries sought to shed their Communist legacy.
In a similar move in 2015, Serbia rehabilitated World War Two royalist commander and convicted Nazi collaborator Dragoljub 'Draza' Mihailovic, a move described by Croatia akin to forgiving Hitler.
Later on Tuesday, Serbia's Foreign Ministry replied to Zagreb to protest Stepinac's rehabilitation saying Belgrade was "horrified with the rehabilitation of the Ustasha NDH."
"Stepinac was the vicar of the Ustasha movement. He blessed crimes and the Ustasha state," Serbian Foreign Minister Ivica Dacic said.
(Reporting by Aleksandar Vasovic; Editing by Richard Balmforth)