An explosive device blew up during a protest by Kosovo Serbs in the flashpoint city of Kosovska Mitrovica killing one man and wounding 11 people, the EU mission said.

Serbia labelled the explosion a "flagrant terrorist act" during the protest by Kosovo Serbs against the opening of a Kosovo government office in the ethnically divided northern city.

Mesud Dzekovic, a doctor, died in hospital from wounds sustained in the blast, Serbian state news agency Tanjug said.

Six women and five men were also hurt in the blast which went off after police stopped several hundred Serbs from getting to the government office building.

Serbs, who make up a majority in the northern part of the city, had gathered to protest the opening of the office, regional police spokesman Besim Hoti said. Police estimated about 1,500 Serbs took part in the protest.

When the protesters were leaving, a loud blast was heard, Mr Hoti said.

The National Security Council of Serbia, headed by President Boris Tadic, insisted the incident was a terrorist attack carried out by Albanian separatists.

Serbia does not recognise Kosovo's 2008 declaration of independence and still considers the territory a breakaway province.

Serbian Foreign Minister Vuk Jeremic described the incident as an "unequivocal attempt to provoke Serbia" ahead of a looming statement by the top UN court on the status of Kosovo, Tanjug reported.

Mitrovica has frequently been the scene of inter-ethnic clashes between Albanians and Serbs.

Kosovo police were investigating the incident, an EU mission spokesman said. The EU mission is working to strengthen Kosovo's police and judicial system.