(Correcting deaths after hospital officials deny third person died)

By Fatos Bytyci

PRISTINA, Serbia, Sept 24 (Reuters) - A bomb blast killed two people when it ripped through shops in the capital of Serbia's breakaway Kosovo province early on Monday in what police said was probably a showdown between criminal gangs.

Police said two people died at the scene and a third was critically injured. Ten others were wounded in the explosion, which happened shortly after 2 a.m. (0000 GMT).

It destroyed several shops, cafes and a burger bar, scattering chairs and glass across Pristina's Bill Clinton Boulevard. Part of a building collapsed.

Irish bomb disposal experts from the 16,000-strong NATO peace force were on the scene and police closed the street.

"Police are not ruling out anything, but it seems it is more likely related to crime," said police spokesman Veton Elshani. "It was caused by an explosive device," he said.

Pristina has seen small bomb attacks, rarely fatal, at times of political tension over the past three years as ethnic Albanian pressure for an end to their limbo status grows. Violence by organised crime gangs is also common.

The latest incident comes at a time of rising tension within Kosovo's 90-percent ethnic Albanian majority over its stalled bid for independence from Serbia.

The territory has been run by the United Nations and patrolled by NATO since 1999, when the alliance bombed Serbian forces to halt atrocities against ethnic Albanians in a two-year war between Belgrade's troops and separatist guerrillas.

Leaders of Serbia and Kosovo are due to hold direct negotiations on the territory's fate on Friday on the sidelines of the U.N. General Assembly.

The West backs independence, but Serbia's ally Russia has blocked a plan for Kosovo's statehood at the U.N. Security Council, forcing more negotiations.

AlertNet news is provided by