PRISTINA - 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 labelled a "terrorist act" by neighbouring Serbia.

Serbia's foreign minister Marko Djuric denied what he said were "baseless allegations" about Belgrade's involvement in an X post on Saturday, and suggested that Kosovo Prime Minister Albin Kurti's government was involved, without providing evidence.

The explosion has increased tensions between the two Balkan countries. Ethnic Albanian-majority Kosovo declared independence from Serbia in 2008 almost a decade after a guerrilla uprising against its rule, but Serbia has not recognised Kosovo as an independent state.

Relations remain especially frayed in the north where the blast occurred, and where the Serb minority refuses to recognise Kosovo's statehood and still sees Belgrade as their capital.

The explosion occurred around 7 p.m. (1800 GMT) on Friday near the town of Zubin Potok. The exact cause was not clear.

Kosovo's Security Council, which held emergency talks early on Saturday, said its armed forces were activated to prevent similar attacks.

Security was already heightened after two recent attacks where hand grenades were hurled at a police station and municipality building in northern Kosovo where ethnic Serbians live.

"The Security Council has approved additional measures to strengthen security around critical facilities and services such as bridges, transformer stations, antennas, lakes, canals," the council said in a statement on Saturday.

Kosovo's Prime Minister Albin Kurti accused criminal elements in Serbia for the attack on Friday, without providing evidence.

"Those who did this attack are not just ordinary crimina...