Police are hunting "would-be murderers" who lured officers into a busy neighbourhood before detonating a bomb designed to kill them.
Dissident republicans opposed to the peace process are being blamed for the attack close to Victoria Street in Lurgan, Co Armagh.
Officers were called to the scene near a cross-border railway line after a phone call to the Samaritans yesterday claiming a device aimed at a police patrol during the early hours had failed to explode.
Homes were evacuated and a hoax device, which was not capable of detonating, was discovered.
But during a follow up search to declare the area safe a suspected anti-personnel bomb designed to "take out officers on foot" exploded.
Superintendent David Moore said the bomb was "significant and absolutely designed to kill".
"It is my belief that the phone call and the first device were designed to lure police into the area to be targeted by the second device," he said.
"This was a clear and unequivocal murder attempt on the policemen and women who serve the community in Lurgan."
Police also came under attack with petrol bombs and bricks during the security operation.
Mr Moore said the murder attempt bore all the hallmarks of "violent dissident republican terrorists."
No one was injured in the explosion which happened some time between 4pm and 5pm.
Rail services between Belfast and Dublin were disrupted for a time because of the closure of the line between Lisburn and Portadown.
"The professional, methodical and diligent way these same officers responded to this incident undoubtedly saved lives, their own and potentially those of local people who were placed in grave danger by the heinous criminals who planted this device," said Mr Moore.
"It is also disappointing that during this operation police officers were subjected to repeated attack with petrol bombs and bricks by a small and unrepresentative section of the community.
"That this should happen whilst police officers were already placing themselves at considerable risk in the interests of keeping local people safe is deeply regrettable.
"I have also been heartened, however, by the support we have received from a much broader section of the local community and those who properly represent them."
A full investigation is under way and he has appealed for witnesses to help identify "these would-be murderers".
Northern Ireland's Justice Minister David Ford led a cross-community chorus of condemnation.
"Whoever set this alert and the device which exploded had a clear intention to kill police officers," he said.
"They showed absolutely no regard for local residents, who could have been killed or injured.
"I join with local community representatives in condemning their hopeless action."
Sinn Fein leader Gerry Adams said those behind the attack are entirely unrepresentative of the wider community and are enemies of peace.
"There is no place for militarist factions who merely serve to drag our society backwards," he said.
Dolores Kelly, SDLP MLA for the area, said the bombs were planted in an area that thousands of people pass through every day.
"Furthermore, the local GAA club had been running events all day attracting people to the area and there was a real potential for devastation given the location of the devices," she added.
Ulster Unionist ex-mayor of Craigavon Colin McCusker said he felt nothing but despair.
"Unfortunately the proximity of this area to the Belfast to Dublin railway line means the actions of these morons reaches much further than just the immediate population, and once again besmirches the good name of Lurgan and its people, who just want to create a better Northern Ireland for everyone," he said.
Policing Board chairwoman Anne Connolly added: "Those who planted the device in Lurgan have clearly no regard for the lives of those who live in the area or police officers doing their jobs to keep people safe."