Two of the victims, an ethnic Albanian man and a woman from Albania, received serious injuries.
Five others, including a woman identified by authorities as Mariana Ilieva Borisova, a citizen of Bulgaria, were being treated for slight injuries in the local hospital, 90 kilometers (55 miles) southwest of the capital Pristina.
The explosion took place on Sunday at 8:30 p.m. (1930GMT) in a bar in the center of the city and it is believed to have been caused by an explosive device.
No motive for the blast was given, but authorities believe rival gangs involved in human trafficking might be behind in the attack.
Veton Elshani, a spokesman for Kosovo's police said authorities have ruled out any political motivation for the attack.
Kosovo, technically a province of Serbia, is patrolled by 16,000 NATO peacekeepers and run by a United Nation mission that took control in 1999 following NATO's air war against Serbian troops accused of a brutal crackdown on separatist ethnic Albanians.
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