Kosovo's Interior minister Xhelal Svecla said on Saturday that police had arrested eight people after an explosion hit a canal that sends water to its two main power plants, an incident Pristina labelled a "terrorist act" by neighbouring Serbia.

Kosovo and Serbia continued to sling allegations at each other on Sunday, just days after an explosion targeting a strategic canal in Kosovo sent tensions soaring between the long-time rivals. "What happened in the village of Varage gave Kurti an alibi to continue the attacks in the north of

Serbia's president has rejected any responsibility for a powerful explosion that temporarily cut water and power supplies to large swathes of neighboring Kosovo.

By Valentina Dimitrievska in Skopje Eight people have been arrested in connection with what Kosovo police have classified as a terrorist attack on a water channel in northern Kosovo at the end of last week.