Two grenades exploded in a Serbian marketplace in Kosovo today, spewing hot metal fragments into the crowd of shoppers and transforming stalls of fresh produce into a bloody tableau of moaning victims. Two people were killed instantly, and nearly 40 others were injured--six seriously with head and internal injuries.

Two ethnic Albanians were arrested in connection with the attack, the NATO-led peacekeeping force in Kosovo said.

The attack, the bloodiest on a marketplace in Kosovo since two ethnic Albanians died in a bombing in June, was the latest in a succession of ethnically motivated hate crimes here that has taken on new dimensions since the end of the NATO air campaign against Yugoslavia and the arrival of tens of thousands of allied peacekeepers three months ago. Today's killings were the 14th and 15th in Kosovo in the past 10 days.

Within hours of the marketplace attack in this suburb of Pristina, the Kosovo capital, crowds of angry Serbs erected a roadblock and backed up hundreds of vehicles for miles on the road from Pristina to the city of Pec in western Kosovo. It was the third roadblock erected by Serbs in the area in the past three days to express their anger over ethnic Albanian attacks and frustration with NATO's inability to protect Kosovo's Serbs.

Since NATO peacekeeping troops arrived here in mid-June, more than 330 civilians have been killed, mostly by members of the opposite ethnic group. House-burnings, a tactic of Serb-led military forces against ethnic Albanians during the recent war, continue today with ethnic Albanians setting the fires. A total of 1,033 cases of arson have been recorded since mid-June, including six between Friday morning and Sunday night.

More than 100,000 Serbs--at least half the prewar Serbian population of Kosovo--have left the province in the face of reprisals by ethnic Albanians, according to the U.N. High Commissioner for Refugees. The majority of Serbs have left since Yugoslav army and Serbian police forces withdrew from Kosovo in June.

The culture of violent revenge persists within the rival ethnic groups, although NATO and U.N. officials blame most of the crimes on a small number of extremists. Four Serbs were arrested last weekend, for example, for alleged participation in the killing of dozens of ethnic Albanians last April in the northern city of Kosovska Mitrovica. Since June, however, more crimes have been committed by ethnic Albanians than by Serbs. As a result, the climate of fear in the dozen or so areas of Kosovo where Serbs remain is now growing particularly intense.

Stanimir Vukicevic, the top Yugoslav government official in Pristina, says he does not dare to speak Serbian in public there. When two of his Foreign Ministry colleagues recently did so, they were kicked and chased down the main street. Vukicevic told a diplomat who telephoned to invite him for lunch last week that "we cannot go to the same place, because there was a small bomb in that restaurant," a comment he tossed off as casually as a comment about the weather.

Kosovo remains a province of Serbia, Yugoslavia's dominant republic, although it is administered by NATO and the United Nations, along with representatives of the ethnic Albanian guerrilla movement that fought a 16-month war for independence.

The police blotters for the past week tell a tale of repeated, discriminate and highly lethal attacks. Last Wednesday, a Serb was wounded and another killed in a grenade attack in Lipjlan, south of Pristina. An ethnic Albanian was slain near the eastern city of Kamenica, allegedly by two Serbs. On Saturday, a Serbian couple was pulled from their car in western Kosovo and beaten by an ethnic Albanian. The same day, an ambush on a tractor carrying 12 Serbs, presumably carried out by ethnic Albanians, left one person dead and four injured near Kamenica.

On average, according to U.N. police commissioner Sven Fredriksen, 20 to 30 murders have occurred each week in Kosovo over the past few months. "The hate is enormous," he said. "Almost all of them are ethnically motivated."

Most of the violence is astonishingly brutal, rivaling the brutality of Serbian attacks on tens of thousands of ethnic Albanians during the war. On Sunday, for example, a 15-year-old ethnic Albanian girl in the village of Slovina south of Pristina admitted beating to death a middle-aged Serbian man and then setting his body on fire. When U.N. police investigators arrived on the scene, they noticed her laughing in the midst of a crowd of jubilant bystanders.

"In some places, when we're removing the body, they're clapping," said Michel Lefebrve, a forensic investigator from the Ottawa police force who volunteered to work on the homicide unit at U.N. police headquarters in Pristina. "Two weeks ago, we had a case in Pristina where a 70-year-old woman was shot 17 times. Now, why would someone want to do that?"

British military officers stationed in Kosovo Polje said that today's grenade attack was the third major act of violence here in the past two days. Two Serbs were stabbed on Sunday night near an apartment complex, and another was shot in a nearby village.

"We've had people burning people, people killing people and people burning houses," said one British officer of the violence in this Pristina suburb, a mixed ethnic community that was the site of extensive Serbian violence against ethnic Albanians during the war.