A device that exploded in the Short Strand area of east Belfast is believed to have been a pipe bomb, police have said.
The PSNI said they found the remnants of a device in Clandeboye Drive after reports of a "loud bang" at about 13:30 BST on Wednesday.
The explosion came after contractors removed material from a bonfire on Cluan Place.
A Sinn Féin councillor described the incident as "a sectarian attack".
"This was a reckless indiscriminate attack on homes in Clandeboye and it's fortunate that no one has been injured," said Mariead O'Donnell.
"This attack has naturally raised tensions in the local community and I am calling on people to remain calm."
Louise McCann, a resident on Clandeboye Drive, said she heard a "deafening bang".
"I automatically ran straight through the house, came out and the place was covered in smoke.
"My partner jumped into the car, as the kids were standing at the bottom of the street, to get the kids into the car.
"But we didn't realise the car had actually been damaged. A part of whatever the device was was stuck in the car."
She added: "I actually thought the children were dead, they were hysterical, all of them, the whole place was hysterical.
"It was the most frightening experience of my whole life."
The attack came after police in riot gear protected masked contractors as they removed material from the Cluan Place bonfire.
Bonfires are traditionally lit in many loyalist areas of Northern Ireland on the Eleventh Night - the eve of the Twelfth of July.
The fires mark William of Orange's victory over King James II at the Battle of the Boyne in 1690 and supporters say they are an important part of loyalist culture.