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.

Kosovo worked to shore up water and power supplies on Saturday and stepped up security at strategic sites after an explosion hit a canal that sends water to its two main power plants, an incident Pristina labeled a “terrorist act” by neighboring Serbia.

An explosion on Friday evening damaged a canal in northern Kosovo supplying water to two coal-fired power plants that generate nearly all of the country's electricity, Prime Minister Albin Kurti said,

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.