* Kosovo split from Serbia in 2008
* West declares end to "supervised independence"
* State still dogged by de facto ethnic partition
By Fatos Bytyci
PRISTINA, Sept 10 (Reuters) - A Western-led body supervising Kosovo's first years of independence closed its doors on Monday, leaving NATO peacekeepers and EU police to deal with a stubborn ethnic partition in the last country carved from Yugoslavia.
A group of mainly Western powers that recognised Kosovo in 2008 had monitored the Albanian majority's protection of minority rights under a settlement drafted by former Finnish president Martti Ahtisaari.
On Monday the International Civilian Office declared the package "substantially implemented" and formally ended the supervision along with the mandate of chief envoy Pieter Feith.
Prime Minister Hashim Thaci, a former guerrilla commander in Kosovo's 1998-99 war, hailed the step as an "act of trust".
But the oversight will continue in the shape of 6,000 NATO peacekeepers and over 1,000 European Union police officers, prosecutors and judges tasked with tackling deep-rooted corruption and sporadic ethnic violence.
Thaci's government has yet to extend its writ to a strip of northern territory populated by minority Serbs and propped up by Serbia - a challenge to Western powers which said they would never allow Kosovo's ethnic partition.
Feith conceded his mandate had not been fulfilled "100 percent".
"The fact that rule of law could not be extended to the north is ... disappointing," the Dutch diplomat told a joint news conference with Thaci.
OBAMA: "MORE WORK TO BE DONE"
In a statement issued by the White House, U.S. President Barack Obama said the country of 1.7 million people had made "significant progress", but added:
"There is more work to be done, as Kosovo's leaders now assume full responsibility for ensuring that the principles enshrined in its declaration of independence and constitution are realised for every citizen."
There was none of the fanfare or celebration in the streets that accompanied Kosovo's February 2008 declaration of independence from Serbia after nine years as a ward of the United Nations.
Serbia lost control over Kosovo in 1999 after an 11-week NATO air war to halt the killing and expulsion of ethnic Albanians by Serb forces fighting a two-year counter-insurgency war under late strongman Slobodan Milosevic.
More than 90 countries, including the United States and 22 of the EU's 27 members, have recognised the impoverished, landlocked country as a sovereign state.
Serbia - backed by U.N. Security Council veto-holder Russia - has vowed never to do so, but is under pressure from the EU to improve relations if Belgrade is to make progress on the long road to membership of the 27-nation bloc.
"To celebrate without the north, for me, is insane," said Kosovo Albanian analyst Lumir Abdixhiku of the Riinvest research institute. "A very big part of the Kosovo territory is beyond all Kosovo institutions," he told Reuters.
"Kosovo does not control an army, Kosovo does not control its judicial system, so in many aspects Kosovo does not decide for itself." (Additional reporting by Matt Spetalnick in Washington; Writing by Matt Robinson; Editing by Alison Williams)