The discovery of a Russian-made rocket launcher – a weapon once used to deadly effect by the IRA in the 1980s – has been described as a "sinister development".
The powerful RPG-7 launcher and warhead were seized from an unoccupied house in west Belfast on Tuesday night during a police operation against dissident republican activity.
Terry Spence, chairman of the Northern Ireland Police Federation, said the officers involved in the operation did a "magnificent job" by seizing a viable weapon that "could have had lethal results had it been used".
He warned, however: "This is a sinister development and shows that terrorists are active."
The PSNI said that the discovery of the weapon demonstrates the continuing intent of dissidents to "inflict death and serious injury".
"It also displays the callous disregard these small groups have for the lives of those in local communities, given where it was stored and its potential to injure or kill anyone in the vicinity of where it would have been fired," a police spokesman added.
The PSNI vowed "to use every lawful means to disrupt and dismantle groups committed to violence".
Residents on Hawthorn Street, off the Springfield Road in west Belfast, had to be evacuated from their homes after the discovery of the weapon on Tuesday evening.
The Provisional IRA frequently used rocket launchers during its terrorist campaign.
A security source said it was "highly likely" the weapon was going to be used in a murderous attack on police.
The source also said the fact police knew where to search for the weapon suggests "good intelligence" against dissidents "continues to develop".
Justice Minister David Ford said it was clear "that such a weapon had the potential to cause death and serious injury, especially in a built-up area".
Policing Board member Jonathan Craig said that community co-operation with the police is an essential component of an intelligence-led campaign against the dissidents.
The RPG-7 is a Soviet portable, unguided, shoulder-launched, anti-tank rocket-propelled grenade launcher. It was used by the Provisional IRA throughout the Troubles – most notably in Co Armagh, where it was used against Army observation posts. Former Libyan leader Colonel Gadaffi provided the IRA with its first RPG-7s in arms shipments.