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.

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.

Kosovo's Interior minister Xhelal Svecla said 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 labeled a "terrorist act" by neighboring Serbia.