The Hague war crimes court has overturned the convictions of two Croatian generals charged with atrocities against Serbs in the 1990s.
Appeals judges ordered the release of Ante Gotovina and Mladen Markac.
In 2011 they were sentenced to 24 years and 18 years respectively over the killing of ethnic Serbs in an offensive to retake Croatia’s Krajina region.
The men arrived in Zagreb later on Friday to a hero’s welcome. But their release was condemned in Serbia.
On Friday morning, the presiding judge at the tribunal for the former Yugoslavia, Theodor Meron, said the court had entered “a verdict of acquittal” for General Ante Gotovina and General Mladen Markac, both aged 57.
Last year the two men were convicted of murder, persecution and plunder.
Judges at the time ruled that they were part of a criminal conspiracy led by late Croatian President Franjo Tudjman to “permanently and forcibly remove” the Serb civilian population from Krajina.
But on Friday, Judge Theodor Meron said there had been no such conspiracy.
The appeals judges also said the 2011 trial chamber had “erred in finding that artillery attacks” ordered by General Ante Gotovina and General Mladen Markac on Krajina towns “were unlawful”.
The two former generals have always argued that they did not deliberately attack civilians.
Court officials also said prosecutors would not appeal against the ruling, describing it as “the final judgement”.
Neither defendant showed emotion in court, but their supporters in the gallery hugged each other and clapped after the verdict.
The Hague war crimes court has acquitted Croatian generals Ante Gotovina and Mladen Markac charged with atrocities against Serbs in the 1990s
In Zagreb’s main square, thousands of people – who watched the proceedings live on giant TV – burst into applause.
“Our generals are heroes because they risked their lives to save our country and liberate the people,” student Andjela Anic, 26, was quoted as saying by the AFP news agency.
“The verdict confirms everything that we believe in Croatia: that generals Gotovina and Markac are innocent,” Croatian President Ivo Josipovic said.
On Thursday, candle-lit vigils were held in Zagreb and Catholic churches around the country as war veterans and bishops asked supporters to “raise their voices against injustice”.
After the verdict, the two former generals were driven from The Hague to nearby Rotterdam airport before boarding the government plane to fly back home.
“I think it is only fair to get the boys back home,” Croatian Prime Minister Zoran Milanovic told reporters.
Meanwhile, Serbia’s President Tomislav Nikolic condemned the verdict as “political”, saying it “will open old wounds”.
Serbian Deputy Prime Minister Rasim Ljajic said The Hague tribunal had “lost all its credibility”, Serbia’s Beta news agency reported.
Rasim Ljajic said the appeals decision was “proof of selective justice which is worse than any injustice”.
He added that it was “a move backwards and the public opinion of the tribunal (in Serbia) will be worse than it already is”.
Gen. Ante Gotovina and Gen. Mladen Markac were last year convicted over the Croatian offensive in Krajina, which had been under Serbian control since the start of the war in 1991.
About 200,000 ethnic Serbs were driven from Croatia in 1995 and at least 150 were killed in a military offensive in Krajina known as Operation Storm.
The operation to retake the region was ordered by Franjo Tudjman. The Croatian leader died in 1999 while under investigation by The Hague tribunal.
The aftermath of the war is a key issue both in Croatia’s domestic politics and its external relations.
The European Union made it clear to former Yugoslav republics that they will not be considered for membership until war criminals were brought to justice.
Croatia is expected to join the EU in July 2013.
Charles Taylor, the former president of Liberia, has been sentenced to 50 years in jail by a UN-backed war crimes court.
Last month Charles Taylor was found guilty of aiding and abetting rebels in Sierra Leone during the 1991-2002 civil war.
Special Court for Sierra Leone judges said the sentence reflected his status as head of state at the time and his betrayal of public trust.
Charles Taylor, 64, insists he is innocent and is likely to appeal against the sentence, correspondents say.
The appeal process could last up to six months.
During the sentencing, Judge Richard Lussick said the crimes in Sierra Leone were some of the most heinous in human history.
The prosecution had wanted an 80-year prison term, but the judge said that would have been excessive – taking into account the limited scope of his involvement in planning operations in Sierra Leone.
However, Judge Lussick said in return for a constant flow of diamonds, Charles Taylor provided arms and logistical and moral support to the Revolutionary United Front rebels – prolonging the conflict and the suffering of the people of Sierra Leone.
“While Mr. Taylor never set foot in Sierra Leone, his heavy footprint is there,” the judge said.
Charles Taylor, the former president of Liberia, has been sentenced to 50 years in jail by a UN-backed war crimes court
In its landmark ruling in April, the court found Charles Taylor guilty on 11 counts, relating to atrocities that included rape and murder.
He became the first former head of state to be convicted of war crimes by an international court since the Nuremburg trials of Nazis after World War II.
In response, Charles Taylor accused the prosecution of paying and threatening witnesses in his war crimes trial.
He also told the judges to consider his age when making their decision, saying he was “no threat to society”.
But the trial chamber said given his social background, “rehabilitation” was not likely.
The fact that he had not expressed remorse also affected the sentence, the judge said.
He had condemned atrocities across the world, and had the “deepest sympathy” for victims in Sierra Leone, but stopped short of apologizing for his part in the conflict.
The judges agreed with the prosecutors that Charles Taylor’s age, or the fact that he has a family, should have no impact on the sentence.
In written filings, prosecutors said a sentence of 80 years would reflect the severity of the crimes and the central role that Taylor had in facilitating them.
“The purposely cruel and savage crimes committed included public executions and amputations of civilians, the display of decapitated heads at checkpoints… public rapes of women and girls, and people burned alive in their homes,” wrote prosecutor Brenda Hollis.
But defense lawyers said the recommended sentence was “manifestly disproportionate and excessive”, and that Taylor had only been found guilty of an indirect role – aiding the rebels, rather than leading them.
They said their client should not be made to shoulder the blame alone for what happened in Sierra Leone’s war.
The court should not support “attempts by the prosecution to provide the Sierra Leoneans with this external bogey man upon whom can be heaped the collective guilt of a nation for its predominantly self-inflicted wounds”, his lawyers wrote.
During the Sierra Leone civil war, Charles Taylor supported RUF rebels who killed tens of thousands of people.
The war crimes included murder, rape, the use of child soldiers and the amputation of limbs.
Taylor was accused of channelling weapons to them in return for “blood diamonds” but the judge said the prosecution had failed to prove their case that he had given orders to the RUF.
The case is being heard in The Hague for fear that a trial in Sierra Leone could destabilize the region. The Dutch government only agreed if Taylor would serve any sentence in another country, so he will serve any prison term in the UK.