The move challenges an April 19 deal brokered by the European Union which forces Serbia to normalise ties with Kosovo, which declared independence in 2008.
In return, Belgrade would get to start EU accession talks and the 40,000 ethnic Serbs who live in northern Kosovo be granted some level of autonomy.
"By establishing the assembly we defend the Serbian constitution and show that Kosovo is still part of Serbia," said Kosovo Serb leader Slavko Stevanovic.
"For Kosovo Serbs, the capital is Belgrade, our state is Serbia. We do not want another state, another citizenship nor another legal system," he said.
"We will not take part in the November elections, we have our legally chosen representatives," Stevanovic, who was picked to head up the new body by 97 deputies, said.
The Kosovo Serbs' move was not backed by Belgrade.
"The assembly goes against the accord and I do not see what weight it could have without Belgrade's support," said Milovan Drecun, a top Serbian official.
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