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

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 labelled a "terrorist act" by neighbouring Serbia.

Kosovo police have detained eight people suspected of being part of the attack, according to Interior Minister Xhelal Svecla. A big cache of weaponry, ammunition, military and police uniforms, cash and other items were confiscated at 10 locations in the north.

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'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’s prime minister said an explosion late Friday night at a key water canal was a “terrorist act” and accused groups aligned with Serbia of having been behind it.