Police believe a Real IRA car bomb, which exploded in Derry early yesterday injuring two PSNI officers as they evacuated the area, had been abandoned by the terrorists.
Officers disclosed last night they did not think that either a bank or hotel, both damaged by the blast, was the intended target.
They said it appeared that the bombers were planning to strike elsewhere in the city but abandoned the bomb because of the police presence in the area.
Last night, anti-terrorist officers warned the blast could herald the start of more frequent attacks by dissident republicans in the run-up to Christmas.
The bomb contained over 200 pounds and was bigger than the Real IRA blast outside the nearby Strand Road police station in August.
The explosives had been packed into a Vauxhall Corsa car, which exploded on the Culmore Road, on the outskirts of the city, shortly after midnight.
Two police officers received injuries to their necks and ears when they were knocked to the ground by the explosion.
The car was parked close to a branch of Ulster Bank, a row of shops and the Da Vinci Hotel, where over 200 guests were staying. The bomb caused considerable damage.
The bank had previously been targeted by dissidents.
The car bomb exploded hours after PSNI deputy chief constable Judith Gillespie and Garda Commissioner Fachtna Murphy had warned at a cross-border organised-crime conference that the dissidents had improved their bombing capability and were now using a range of techniques.
The Republic's Justice Minister Dermot Ahern warned the dissidents last night that while they were a small band of determined people, they were dealing with a much larger band of equally determined gardai and PSNI officers.
Police officers from both jurisdictions reckon that the combined strength of the dissidents is about 500 activists, with 150 of them based on the southern side of the Border.
The Real IRA group behind the Derry blast is aligned to an experienced terrorist based in the city. It has connections with a Louth-Armagh faction.
Northern Ireland's deputy first minister Martin McGuinness, who was addressing a meeting at the UK Conservative party conference in Birmingham, condemned what he called "the futile activities of these conflict junkies".
"People in this city (Derry) are horrified that there are still these neanderthals within our society," he said.
Mr McGuinness added that the objectives of the dissidents were to destroy the peace process, break the unity of the Stormont executive, turn back the clock on policing and embarrass Sinn Fein. On all four counts, they had failed miserably.
Taoiseach Brian Cowen said the bombing was a wanton act of violence that served no purpose and he described it as an "appalling" incident.