Two more people were arrested and questioned yesterday in connection with the murder on Thursday of Mr David Caldwell at a Territorial Army centre in Derry.
Five people are now being questioned by police about the incident in which the 51-year-old construction worker was killed by a booby-trap device. Republican dissidents are still thought to be responsible.
The arrests came as divisions between the Northern Secretary and the DUP sharpened with Dr John Reid rejecting claims from Dr Ian Paisley that the Belfast Agreement was not fostering peace and stability.
The North Antrim MP returned to the attack on Dr Reid again yesterday claiming he was "perpetuating the myth" that the situation was improving since the signing of the accord on Good Friday 1998.
Dr Reid claimed in a series of media interviews that recent violence originated not from the agreement but as a result of ruthless fanatics wishing to bring it down.
"There is a myth going around that this violence is only the result of the peace process, as if it never happened before," he said. "The reality is that there is a lot less violence than there was 10 years ago but it is escalating at present because those extremes on both sides desperately want to kill the peace process and put themselves back centre stage in dominating the politics by the gun."
Dr Paisley countered by saying: "At our meeting with the Prime Minister in Downing Street earlier this week, at which the Secretary of State was present, he was confronted with incontrovertible figures confirming the massive increase in shootings and bombings since the agreement was signed. Despite this, he continues to state that the situation is much better, though he has to go back 10 years to make his comparison."
The Northern Ireland Office is keen to differentiate between the violence of "rejectionist" loyalist groups and dissident republicans on one hand and alleged Provisional IRA activity on the other. A political source at Stormont said there was a distinction to be drawn between those in the IRA who are in transition from conflict to peace and others solely intent on blowing the political process apart.
Promising a tough response to violence, Dr Reid said yesterday: "All I can say is that if you look, for instance, at the dissident republicans, there are significant numbers of their leaders in jail, there are others facing more charges and there are continuing arrests. We are doing what we can."
There was further sectarian violence overnight in Belfast. Arsonists set fire to a Presbyterian church on the Shore Road in north Belfast. The church, which was destroyed, is close to the parish of Father Dan Whyte who officiated at the funeral of Gerard Lawlor shot dead by the UDA nearly two weeks ago. Father Whyte's church was also attacked by arsonists last year.
Another blaze was started in a nearby motor dealership and six lorries were destroyed.