The Real IRA has claimed responsibility for a car bomb that exploded near a hotel and a bank in Derry shortly after midnight last night.
The device was left in a Vauxhall Corsa car outside a branch of the Ulster Bank on the city’s Culmore Road.
In a telephone call to the Derry Journal today, the dissident republican group said it planted the bomb.
The PSNI said a warning had been received about an hour before the bomb exploded and the area was cordoned off.
Two police officers who were on duty at the scene in the Culmore Road in the city were blown off their feet and suffered neck and ear injuries. They remained on duty as the PSNI investigation got under way and the area was made safe.
Nobody else was hurt in the blast which severely damaged the bank offices and forced the evacuation of Da Vinci's hotel and dozens of homes in the vicinity.
The attack comes at a time of rising optimism in Derry after it was named UK Capital of Culture for 2013.
Northern Ireland Deputy First Minister Martin McGuinness condemned the attack this morning, saying that those who carried it out had "failed miserably."
The Sinn Féin MP, who was in Birmingham today to address a meeting on the fringes of the Conservative Party conference, said he was disgusted by the attack.
“These conflict junkies are attempting to drive a city living very much to the future, back to the past," he said. “People in this city are horrified that there are still these Neanderthals within our society. They exist to overturn the hope and aspirations of the people of Ireland. They will not destroy the peace process," he said.
Mr McGuinness later rejected suggestions that the bombing was timed to overshadow his appearance today at a breakfast meeting with Secretary of State for Northern Ireland Owen Paterson at the Birmingham conference.
Mayor of Derry Colum Eastwood said this morning the bomb exploded in front of him. "I was in the area as I had got word of the warning. The car's spare tyre landed about ten yards away from me. I am shocked and angry," he said.
"I don't know what these people are trying to achieve. This is an attack on the people of Derry and the people of Ireland. This city will not be defeated by a minority of people who think they'll free Ireland by putting bombs in hotels."
First Minister Peter Robinson issued a joint statement with Mr McGuinness, which said: “It is clear that the people who carried out this attack have no regard for life or property. Their sole aim is to disrupt our peaceful society and to create a culture of fear.
“We are as determined as ever to build a stable and peaceful society free from sectarianism and we will not allow the achievements of recent years to be destroyed by a small minority who have nothing to offer but a return to the past.”
Mr Paterson condemned the bombing. “The people behind these attacks on the local community have absolutely no political case to argue,” he said. “They have nothing to say about the future and so cling to a past that everyone else has left behind.”
In the Dáil today, Taoiseach Brian Cowen described the attack as a wanton act of violence that served no purpose.
Minister for Foreign Affairs Micheál Martin condemned the bomb, saying it was an attack on the economic infrastructure in Derry.
“Such attacks are utterly wrong and entirely futile," he said. "The perpetrators are trying to undermine the future for our young people. The vast majority of people on this island will not let this misguided few dictate or disrupt that future." Mr Martin urged anyone with information to contact the PSNI.
Minister for Justice Dermot Ahern said he was concerned that dissident republicans were showing signs of increased activity. Speaking on RTÉ radio this afternoon, Mr Ahern said extra resources would be made available to gardaí to tackle the problem if required.
"We won't take our foot off the pedal in relation to this. We're dealing with a small band of determined people. But they're dealing with a large band of determined people in the PSNI and the gardaí," he said. "Because these people don't have significant support, the gardaí have been able to get information on them."
The PSNI tonight released fresh figures on its efforts to combat dissident activity. It said there had been 37 dissident republican incidents so far this year, with 169 arrests and 59 people charged, compared with 17 people charged during all of 2009.
Additional reporting: Agencies