NATO beefs up its troop presence near the disputed Kosovo border with Serbia.
Tensions came to a head on Tuesday when 16 Kosovo Serbs and four peacekeepers were injured in a shootout.
Witnesses said NATO troops used fire arms to disperse ethnic Serb protesters.
Two weeks ago Pristina sent police and customs officials to the region to shore up its authority in an area with strong links to neighbouring Serbia.
Ethnic Serbs retaliated by blocking roads and building a dirt track that bypassed the official crossing point.
(SOUNDBITE) (English) SERBIA'S STATE SECRETARY FOR KOSOVO, OLIVER IVANOVIC, SAYING:
"Yesterday incident between the KFOR and peaceful demonstrators is something what we have to forget, but certainly that's a lesson learnt. I just hope that KFOR will establish the regular communications with the local leaders, with the mayors, in a way to try to calm down the situation and certainly prepare the ground for the some kind of political negotiations.''
The European Commission says the Serbian delegation walked out of EU-mediated talks with Kosovo on Wednesday.
(SOUNDBITE) (English) SPOKESPERSON FOR EU FOREIGN POLICY CHIEF CATHERINE ASHTON, MAJA KOCIJANCIC, SAYING:
''We expect that the dialogue will continue when Serbia side is ready to re-engage. You know that the purpose of the process remains to discuss issues that are aimed at improving lives of the people and bringing the parties closer to the EU. I expect that we will be consulting both Pristina and Belgrade shortly to seek ways how to make progress.''
Belgrade is keen to join the EU but it must mend ties with Kosovo to secure a date for accession talks.
Lily Grimes, Reuters