Hundreds of revellers were evacuated from bars and restaurants in Belfast's busy Cathedral Quarter on Friday night after a bomb exploded.
Police received a warning phone call prior to the explosion, and the area was being cleared when the device went off at around 6:45pm.No one was injured.
The Exchange Street West area where the bomb was planted is filled with bars and restaurants, and is one of the city's most popular nightlife venues.
Republican dissident group Oglaigh na hEireann later admitted responsibility for the bomb, which they said was left inside a rucksack.
The Police Service of Northern Ireland (PSNI) said the bomb "had the potential to kill or cause serious injury".
"The exact nature of tonight's explosive device in the Cathedral Quarter area has not yet been established," a spokesperson added.
Though the warning call said the device had been left at a hotel, it had in fact been left on a footpath outside a packed restaurant.
It is believed that the bomb only partially detonated.
Democratic Unionist Stormont Assemby member Jonathan Craig described those responsible as "absolutely reckless" and said it was a "miracle" that no one had been injured.
Sinn Fein and the SDLP also condemmed the attack.
Northern Ireland Secretary Theresa Villiers said: "On one of the busiest nights of the year, with people enjoying the festivities ahead of Christmas, as well as all those in the final stages of Christmas shopping, it shows that these terrorists are stooping to a new low," she said.
"This small minority want to drain the economic life from Belfast - but we will not let them succeed."
In recent weeks, dissident Republican groups have carried out a number of attacks.
Two weeks ago, the 'new IRA' in Derry forced a female bus driver to take a bomb on to her vehicle then ordered her to take it to a police station. Instead, she risked her life by driving it to a rural location, away from built up areas.
The same week, Oglaigh na hEireann forced a man from the Ardoyne area of north Belfast drive into the centre of the city with a bomb in the back seat of his car. Instead of leaving the vehicle in an underground car park as ordered, he parked outside the Victoria Shopping Centre and ran across the road to a police station.