A blast on a canal vital to Kosovo's water and power supplies has sparked a war of words with Serbia, with fears it could further escalate tensions between the two Balkan nations.The explosion late Friday punched a hole in a canal providing water to hundreds of thousands of people and the cooling systems at two coal-fired power plants that generate most of Kosovo's electricity.

Serbian President Aleksandar Vucic on Sunday denied his country had staged an attack on a strategic canal in neighbouring Kosovo that has reignited tensions between the two.

A significant explosion has disrupted water and power supply in Kosovo, sparking accusations between Kosovo and Serbia. Prime Minister Albin Kurti blames Serbia-backed groups led by Milan Radoicic for the attack.

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

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.

STORY: Kosovo's prime minister said on Saturday (November 30) that police had carried out raids and made arrests after an explosion the day before.The blast, in northern Kosovo, damaged a canal that sends water to two power plants responsible for nearly all the country's electricity.

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.