I am trying to create a flexible div with a background as shown below, any suggestions on how i can do it in css?

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For best cross-browser compatibility I would suggest to cut the box into three pieces:
Top and bottom pieces are not changing. The middle one should have 3px height and full width and be repeated to the y-axis.
If your are not using a reset stylsheet you might have a problem with the empty div showing up the line-height. Have a look at this!