Kosovo stepped up security measures around "critical" infrastructure on Saturday after an explosion at a key canal feeding two of its main power plants, as neighbouring Serbia rejected accusations it had staged the blast.

The explosion occurred on Friday near the town of Zubin Potok in a Serb-dominated area in Kosovo's troubled north, damaging the canal supplying water to cooling systems at two coal-fired power plants that generate most of Kosovo's electricity.

Prime Minister Albin Kurti called a security meeting late on Friday, saying: "This is a criminal and terrorist attack aimed at damaging our critical infrastructure."

"The attack was carried out by professionals. We believe it comes from gangs directed by Serbia," he added without providing any evidence.

The government later issued a statement echoing his allegations, saying that "initial indications suggest" the explosion had been "orchestrated by the Serbian state, which has the capacity to carry out such a criminal and terrorist attack."

Kosovo also "approved additional measures to strengthen security around essential infrastructure and services, such as bridges, transformers" and other sites, it said.

Serbia slapped back on Saturday, condemning the attack, while calling the accusation "premature" and "baseless."

"Such destructive actions are unacceptable and threaten the fragile stability we are striving to maintain," Serbian Foreign Minister Marko Djuric said on X.

"Serbia unequivocally demands responsibility for the perpetrators of this reckless attack," he added, while suggesting the Kosovar "regime" could be behind the blast and calling for an internationally-led investigation.

The main political party representing Serbs in Kosovo, Serb List, also condemned the attack "in the strongest possible terms."

Pictures from the scene published by local media showed water leaking heavily from one side of the reinforced canal, which runs from the Serb-majority north of Kosovo to the capital Pristina and also supplies drinking water.

However, electricity supplies to consumers were running smoothly on Saturday morning, with authorities having found an alternative method for cooling the plants, Kosovo's Economy Minister Artane Rizvanolli said.

Repair work was ongoing, authorities said. (AFP)