The United States, resuming diplomatic relations with Albania for the first time in five decades, hopes the move will encourage democratic reforms in the tiny Balkan nation that had been the last bastion of hard-line communism in Eastern Europe.

The White House, the State Department and the Albanian Foreign Ministry in Tirana said the two countries will sign a memorandum of understanding Friday in Washington re-establishing formal ties.Relations between the United States and Albania ended in June 1939 when Benito Mussolini's Italy took over the conduct of Albanian foreign affairs. Following the end of World War II, a U.S. mission was briefly stationed in Albania, but it was withdrawn in November 1946 following increasing harassment by communist officials.

Albania, the final outpost of Stalinist dictatorship in Eastern Europe, has been ruled by communists since shortly after the war. The Albanian government recently permitted opposition parties to re-establish themselves in a move toward democratic plurality. The country's first multiparty elections in more than 40 years are scheduled to be held March 31.

"The United States and Albania have agreed to re-establish diplomatic relations following a hiatus of nearly five decades," State Department spokesman Richard Boucher said at a news briefing Tuesday.

Boucher said senior Albanian officials headed by Foreign Minister Muhamet Kapllani will travel to Washington to formalize the relations.

"We view the re-establishment of diplomatic relations with Albania as an opportunity to support democratic reform in that country and to encourage Albania to play a constructive role in Europe," he said.

Last July, Albania restored diplomatic relations with the Soviet Union, which were broken off in 1961 after a row with Moscow.