The gunmen fled to a nearby monastery where they barricaded themselves in and traded gunfire with Kosovo police for hours. At least three assailants were shot dead in the melee.
Kosovo's Prime Minister Albin Kurti said at least 30 heavily armed gunmen were surrounded by authorities in the complex and called for their surrender.
Police later said in a statement that at least three attackers had been killed and one arrested during the firefight. Another four civilian suspects carrying radio equipment and weapons were also arrested.
Kosovo police also confirmed that the Jarinje and Brnjak border crossings between Serbia and Kosovo had been closed following the incident.
The attack and ensuing firefight marks one of the gravest escalations in Kosovo for years, following months of mounting tensions and stalling talks between the government in Pristina and Serbia.
The Serbian Orthodox Church also confirmed that gunmen had stormed the monastery in Banjska, where pilgrims from the northern Serbian city of Novi Sad were staying.
Police Minister: 'We Put This Territory Under Control'
Kosovo's minister of internal affairs, Xhelal Svecla, told reporters after the standoff was over that "we put this territory under control. It was done after several consecutive battles."
Svecla said police made several arrests during the clearance operation and seized a large amount of weapons and equipment. However, it remained unclear if all gunmen had been apprehended during the sweep.
The attack and ensuing firefight is a major setback for efforts to normalize relations between Kosovo and Serbia. The two countries have been locked in a long-running dispute over Kosovo's independence, which Serbia declared illegal.
The international community has called for calm and restraint on both sides. (ILKHA)