EU says Kosovo tensions 'unacceptable'

"It is now critical for both sides to return to dialogue, and to resolve the underlying issues without delay," she stressed.

The violence erupted on Monday when the government in Pristina sent special forces to border check points in the majority-Serb populated areas in the northern part of the country to enforce a recent trade embargo with Serbia.

The move was not done in consultation with the EU or Nato's peacekeeping troops stationed in Kosovo. Ethnic Serbs subsequently set up barricades and opened fire at the Kosovo police forces, killing one.

Both Nato troops (Kfor) and the EU's police force, Eulex, intervened and tried to defuse the situation, but on Wednesday night, the checkpoint in Jarinje, northern Kosovo, was set on fire and Nato admitted its forces also got shot at.

"It was confirmed that an act of arson was committed against that position... There have also been confirmed reports of shots fired at Kfor personnel in the vicinity," Kfor said in a statement, adding that it sent reinforcement to the area. Some 5,000 Kfor troops are stationed in Kosovo, along with the EU's 650 police officers.

A cameraman and a sound engineer from Serbia's state-run Tanjug news agency were attacked by Serb hardline nationalists near Jarinje and seriously injured, the agency said.

In Pristina's view, the attack was masterminded in Belgrade, with Prime Minister Thaci accusing Serbia of wanting to carve out a piece of northern Kosovo. "This will never happen," he said.

Serbian President Tadic, however, strongly condemned the events and urged Kosovo Serbs to refrain from violence.

"The hooligans who are sparking violence are not defending either the people or the Serb state," his office said in a statement.

Dialogue between Serbia and its former province, whose independence Belgrade still does not recognise, is an essential condition for the Balkan country to join the EU. Five EU member states have also not recognised Kosovo's independence.

A breakthrough was reached in June, when under EU mediation, the two sides agreed to simplify conditions for their citizens to cross the border. But a second round of talks, due earlier this month, was cancelled amid the trade row which has now led to the border clashes.

The UN Security Council is set to hold an emergency meeting behind closed doors on Thursday, at Serbia's request.