Police say it is a "miracle" no-one was killed or injured by a car bomb near a courthouse in Newry, County Down.
Officers were evacuating the area when the bomb went off at about 2230 GMT on Monday.
Northern Ireland Secretary Shaun Woodward condemned the attack and paid tribute to the officers' bravery.BBC Ireland correspondent Mark Simpson said it was the latest attack by dissident republicans opposed to the peace process.'Substantial blast'Chief Inspector Sam Cordnor said: "It is only by sheer miracle that nobody was killed or injured.
"Our investigations and examination of the area will be full and extensive, and I would appeal to anyone with information, no matter how small, to contact detectives at Newry."
The explosion damaged the gates of the courthouse.
Mr Woodward, who is in the US, said he was pleased nobody had been hurt and described those behind the attack as "people who wanted to destabilise the political process".
He said: "This is an appalling attack by a very small group of people who refuse to accept that peace is working in Northern Ireland."
SDLP Newry and Armagh assembly member Dominic Bradley condemned those who were responsible for the bomb.
"This was a substantial blast which sounded loud where I live - the best part of two miles away," he said.
"I was on the scene shortly afterwards and I can say that local people were absolutely disgusted.
"As far as I could make out, there was only a five-minute warning and police were in the process of evacuating people from New Street/Canal Street when the bomb went off.
"We could easily have been looking at serious casualties or worse this evening and it is no credit at all to the bombers that as far as is known there were no injuries."People are saying that they got enough of this sort of thing during the Provo campaign, it was wrong and senseless then and it is wrong now."'Swift actions'
DUP Newry and Armagh assembly member William Irwin said the bomb was "a cowardly action by those who want to drag Northern Ireland back to the past".
He said it "must be condemned across the community by all those who believe in democracy and oppose terrorism".
"The swift actions of police in ensuring that the area was evacuated must be praised and once again serve of a reminder of the threat which our police officers face daily," he said.Local Sinn Fein MP Conor Murphy said: "The fact that we're in the process of devolving policing and justice powers and there's an attack on a courthouse will not be lost on people.
"These people are trying to drag us backwards and ensure we have the British army back on the streets."Local Ulster Unionist assembly member Danny Kennedy said the bomb was "proof of a deteriorating security situation in Northern Ireland".
NI Secretary Shaun Woodward: "This is an appalling attack"
"There have been a number of very serious incidents - this is by far probably the most serious recently," he said.
"It represents a clear attack on security services and government institutions.
"It shows a very worrying level of capability that these dissidents now have."
It comes days after a mortar bomb was abandoned near a police station in the village of Keady, about 20 miles away.
Last October, Newry courthouse was the scene of a major security alert after an Army bomb disposal team was sent to examine a suspicious vehicle abandoned nearby.
It was later declared to be an elaborate hoax.
Hearings scheduled for Newry courthouse on Tuesday have been moved to Armagh. sauce has a video http://news.bbc.co.uk/1/hi/northern_ireland/8529541.stm