A car that exploded outside a police station in Londonderry contained 200lb of homemade explosives, police have said.
Dissident republicans are being blamed for the attack.
No-one was injured in the attack which happened at 0320 BST but several businesses were badly damaged in the blast.
Police said the bomb was loaded into a hijacked taxi and the driver ordered at gunpoint to drive to the station.
Divisional Commander Steve Martin said it was fortunate no-one was killed because the device went off more than 20 minutes before a warning said it would.
He said two men hijacked a taxi in the Bogside. The driver was taken to Glenfada Park where the bomb was loaded into the car.
The driver was then ordered at gunpoint to drive to Strand Road police station and warned he would be shot if he did not.
Supt Martin said they had been warned the device would go off in 45 minutes, however only 23 minutes had passed when the car exploded.
He also revealed that a policeman risked his own life when he walked past the bomb twice to bring to safety staff at a nearby fast food shop.
The first and deputy first ministers have condemned the attack.
Peter Robinson said he was thankful there was no loss of life.
"Using a taxi driver to deliver the device shows the cowardice of those behind the attack and my sympathies are with him and all those targeted," he said.
Martin McGuinness said those who planned the attack were an "embarrassment" to the people of Derry.
"It's about trying to undermine the peace process, about trying to undermine Sinn Fein's peace strategy," he said.
"If they think they will destroy the political institutions the people of Ireland voted for, if they think they're going to destroy the working relationship I have with Peter Robinson, if they think they will undermine the peace process they are living in cloud cuckoo land."
Northern Ireland justice minister David Ford also condemned those responsible.
"It allowed very little time for police to evacuate people who live in the immediate area," he said.
"It was frankly an attack on the police service of the whole community and therefore an attack on everybody in Derry."
The Irish minister for foreign affairs, Micheal Martin, said he deplored "an act of reckless, senseless criminality which put at risk the lives of the community and which only acts to reinforce divisions on this island".
SDLP MP Mark Durkan said the bombing was "a cowardly, dangerous and vulgar act".
"Those responsible for this incident have achieved nothing and this campaign of violence will achieve nothing," he said.
Lotfi Jalloul, whose kebab shop was destroyed in the blast, had been cleaning up for the night when he saw the car arrive at the police station.
"I thought he was a taxi driver picking up a passenger but about 15 minutes later, we were evacuated by the police," he said.
"There was a lot of panic. I left the money in the till and didn't even get the chance to pull down the shutters - thank God we got out of there, I can't believe we're still alive."
He said he had been told his business had been destroyed by the explosion but had not yet been able to see what damage was caused because the area remains cordoned off.
Conor Kelly, who lives in an apartment block near the police station, said it had been a terrifying experience.
"I was still awake and reading when I heard an enormous noise like thunder and saw debris flying past my window," he said.
"There were no alarms or attempts to evacuate the building."
He said the front of a fast food outlet had been "ripped to shreds" and other buildings had windows blown out.
In May, a mortar bomb was fired at the same police station. It struck a wall but failed to explode.
The attack comes just weeks after Derry was picked to be UK City of Culture in 2013.