A suspicious package found near a mosque was a small home-made explosive device, police have confirmed.
West Midlands Police also said a loud bang heard by residents in the Caldmore area of Walsall late on Friday "appeared to be consistent" with the device exploding.
No one was injured and minimal damage was caused around the device, which was found by a local man on Saturday in an alleyway adjoining the Aisha Mosque and Islamic Centre.
Police were called to the mosque on Rutter Street at around 10.45pm on Saturday following the discovery of the bomb, which had initially been taken home by a worshipper who failed to realise what it was.
Assistant Chief Constable Sharon Rowe said: "The force is taking this attack against the mosque very seriously and we have a major investigation under way. To that end, I have called in support from all over the force, including the West Midlands Counter Terrorism Unit, which has a number of experts supporting the inquiry. Specialist investigators have been working all day and continue to ensure that we maximise every opportunity from the crime scene."
The senior officer added: "At this stage we are keeping an open mind on a motive, but have recorded it as a hate crime. A hate crime is any criminal act committed against a person or property that is motivated by the offender's hatred of people because of their gender, race, religion, disability or sexual orientation."
The investigation is being supported by officers from the neighbourhood policing team, and anyone who heard or saw anything suspicious in the area on either Friday or Saturday is urged to contact police.
Although the planting of the device is being described by police as an isolated incident, increased patrols have been put in place in Walsall and across the force area to provide community reassurance.
Zia Ul-Haq, who acts as a spokesman for the mosque and also sits on its committee, thanked the police and the local council for their support following the discovery. Mr Ul-Haq told reporters: "We found this suspicious item which we didn't consider to be very serious or very threatening, but as a precaution we thought that we would call the police and bring this to their attention. They have taken this very seriously and they have supported us wholeheartedly and we are very grateful to the police and the local authority."
Mr Ul-Haq revealed that the remnants of the exploded device were initially taken home on Saturday by both a worshipper and an imam who failed to realise its significance.