By Daria Sito-Sucic

SARAJEVO (Reuters) - Hopes that Bosnia's fractious leaders were near a deal to end a standoff blocking the country's bid to join the European Union receded on Wednesday, when one top official said they were only "halfway there".

Seven leaders from the main Serb, Croat and Bosniak (Muslim) parties issued a joint statement in Brussels on Tuesday saying they had agreed to "urgently" settle their differences over Bosnia's constitution, set down under a peace deal to end the country's 1992-95 war.

For a moment the statement raised expectations of an imminent breakthrough. It offered little in terms of solutions, however, and set a new deadline of October 10, before a European Commission progress report due six days later.

"We put the meeting on hold," Peter Sorensen, the EU's envoy to Bosnia, said on his return from Brussels.

"We gave the leaders until October 10 to come back with a concrete proposal," he told reporters, adding: "I believe it is durable but the devil is in the detail."

For almost four years, Bosnia's leaders have been unable to agree on how to amend the constitution to address a ruling by the European Court of Human Rights that it discriminates against minorities by reserving high public office for Serbs, Croats and Bosniaks.

The arrangement reflects the power-sharing terms of the 1995 peace accord that ended their war, but was challenged by a Bosnian Roma and a Jew in a landmark case in Strasbourg.

Negotiations to change the constitution have become hostage to political bargaining, in particular a push by Bosnia's Croats to win greater protection of their rights. Returning to Sarajevo, each leader appeared to offer a different interpretation of their Brussels statement.

Bakir Izetbegovic, the Bosniak representative on Bosnia's tripartite rotating presidency, said they were only "halfway there" and warned of the risk of EU sanctions and exclusion from the Council of Europe should they fail.

"This is an opportunity to focus on finding a solution, to avoid sanctions," he told reporters in Sarajevo.

Bosnia trails its fellow former Yugoslav republics in the quest to become a member of the EU, for years the main driver of reform and stability in the Balkans by offering the hope of prosperity, investment and freedom of movement.

Jakob Finci, the Bosnian Jew who successfully challenged the constitution in Strasbourg, reflected the mood of skepticism in Sarajevo, saying: "We hope they may do something by October 10 but it's difficult to expect that something that was not done for 45 months could now be done in eight days."

(Editing by Matt Robinson and Andrew Heavens)