Hundreds of Serbian women demonstrated in Kosovo on Wednesday, in protest against ethnic-Albanian authorities who they accused of seeking to "ghettoise" the Serb minority.

The protest in the north of Mitrovica -- long a flashpoint between Serbs and ethnic Albanians -- took place as Serbian and Kosovar officials try to find a solution to a row over number plates.

The dispute erupted after Kosovo said the country's ethnic Serbs would be fined if they did not swap vehicle licence plates issued by Serbia for registration numbers issued by Pristina.

The underlying source of tension is Kosovo's 2008 declaration of independence from Serbia. The latter does not recognise the move and has encouraged Kosovo's Serb minority to remain loyal to Belgrade. 

The dispute has sounded alarm bells in the European Union, which has been seeking to normalise ties between Serbia and Kosovo and wants both to refrain from provocative gestures.

EU foreign policy chief Josep Borrell said late Wednesday that Kosovo and Serbia had agreed to steps to take some of the heat out of a long-running dispute.

"Very pleased to announce that (the) chief negotiators of Kosovo and Serbia under EU-facilitation have agreed to measures to avoid further escalation," he tweeted.

Borrell said the deal reached by both sides entailed Serbia ceasing to issue licence plates with markings indicating Kosovo cities, and Kosovo "will cease further actions related to re-registration of vehicles".

He tweeted after hosting Kosovar Prime Minister Albin Kurti and Serbian President Aleksandar Vucic in Brussels for negotiations.

Earlier in the day, protesters in the city of Mitrovica accused Kurti of "terror" and "inhuman treatment" as they marched through the streets of the northern city.

Some held up placards that read "women united to liberate the ghetto" and "I want peace".

The dispute over vehicle licence plates has also provoked the ire of Kosovo Serbs in official positions.

Hundreds of police officers, judges, prosecutors and other civil servants have left their posts, causing a breakdown in the rule of law and raising fears of heightened tensions.

Mitrovica has remained ethnically divided between the Serb-majority north and the Albanian-majority south since the 1998-1999 war between Serbian forces and Albanian rebels.

Serbs make up around 120,000 of Kosovo's roughly 1.8 million population, which is overwhelmingly ethnic Albanian.