Kosovo police have arrested a Serbian national suspected of planning a terrorist attack, the interior minister told a news conference on Friday.

The suspect, from Belgrade, was arrested on Thursday evening with 12.2 kilos (27 pounds) of explosives in his car in a street in the Kosovan capital Pristina where many Western embassies are located, Skender Hyseni said.

"We suspect the clear aim of this person was to commit a terrorist attack," he told journalists.

Kosovo media speculated that possible targets were the embassies of western countries or the Catholic cathedral. Hyseni said he could not reveal details of potential targets because the investigation was still under way.

Security is fragile in Kosovo, which declared its independence from Serbia in 2008 following a 1998-99 war in which NATO warplanes bombed Serbia. Some 5,000 NATO troops remain stationed in the new country.

“Police had information in recent days that there could be attempts to destabilise the country during end-of-year festivities,” Hyseni said. “These worries have turned out to be 100 percent true.”

More than 90 percent of Kosovo's 1.8 million people are Muslim but the end-of-year holidays are the biggest celebrations for the secular republic. The prosecution identified the Serbian suspect in detention only as S.G., born in 1968.

President Atifete Jahjaga's office said she had asked neighbouring countries to cooperate with the Kosovo authorities to investigate the case. This could prove difficult because Serbia does not recognise Kosovo’s statehood.

Kosovo has raised the alarm over its citizens going to fight in Syria and Iraq for Islamic State. More than 20 Kosovars have been killed in the two countries and security agencies say between 100-200 people from Kosovo are believed to have gone to fight for the Islamist group.