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

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