* Croatian general freed after warcrimes conviction overturned
* Jubilation on the streets of Croatian capital
* Serbia says U.N. war crimes court lost all credibility
An appeals court overturned on Friday the conviction of the most senior Croatian military officer charged with war crimes during the Balkan conflicts of the 1990s, and ordered his immediate release.
General Ante Gotovina was cleared of targeting hospitals and other civilian institutions during a 1995 Croatian army operation to retake its Krajina region from rebel ethnic Serbs, who had seized control of it four years earlier.
Gotovina, hailed as hero at home but reviled in neighbouring Serbia, was freed along with Croatian police commander Mladen Markac. The two men were expected to fly home later on Friday.
The acquittals were greeted with jubilation on the streets of the Croatian capital Zagreb but Serbia reacted with dismay, Deputy Prime Minister Rasim Ljajic saying the U.N. war crimes tribunal had lost "all credibility" with its decision.
The appeal hearing marks the biggest reversal by the tribunal during its near two decades of hearing cases involving the bloody breakup of the former Yugoslavia.
Gotovina was a commander when the Croatian army, aided by U.S. and NATO military advisers, ousted rebel Serb forces from the Krajina region in Operation Storm.
Prosecutors had accused Gotovina him of illegally targeting civilian institutions in the Krajina towns in a deliberate attempt to spread fear to drive Serbs out of the region.
But appeal judges said civilian institutions had not been targeted on purpose, ruling: "Without a finding that the artillery attacks were unlawful, the Trial Chamber's conclusion that a joint criminal enterprise existed cannot be sustained."
Gotovina, a commander in Croatia's Split district at the time, was jailed for 24 years at the end of his original trial. Markac was sentenced to 18 years.
Crowds in Zagreb erupted with joy at the acquittals, which were broadcast live by several Croatian TV stations, clapping and cheering.
Prime Minister Zoran Milanovic told a news conference Croatia would send a jet to pick up the pair: "I think it is only fair to get the boys back home."
But he said Croatia, which joins the European Union next year, would fulfil its obligation to prosecute crimes from the Yugoslav wars, in which at least 100,000 people died.
"There were mistakes in the war, for which Croatia is responsible and for which it will do its debt to justice," he said.
However, in Belgrade, Serbia's point man for cooperation with the U.N. tribunal reacted angrily to the decision.
"There is no logic. Crimes were indisputably committed during Operation Storm, but so far no one has been sentenced for that," Ljajic, who heads Serbia's national council for cooperation with the tribunal told state-owned Tanjug news agency.
The International Criminal Tribunal for the Former Yugoslavia has jailed people from all ethnicities since it was created. But most have been Serbs, leading many in Serbia to dismiss it as a "NATO court".