Belfast: A massive car bomb that failed to explode properly was designed to cause widespread destruction in Belfast, police said on Sunday, underscoring the threat to Northern Ireland`s fragile peace.
The car, containing a 400-pound (180-kilogramme) device, crashed through barriers outside a police headquarters in Belfast late on Saturday and partially exploded, police said.
Elsewhere, police exchanged shots with paramilitaries in a border village. Three people have been arrested in Northern Ireland and one across the border in the Republic of Ireland, police said.
The attacks come at a delicate time for Northern Ireland`s peace process.
The main Protestant and Catholic parties, who share power in the province`s devolved assembly, are at loggerheads over when policing and justice responsibility should be transferred from London.
The threat from dissident paramilitary groups opposed to the peace process is at its highest for six years, according to the watchdog monitoring their activities, which called the situation "very serious".
A police spokeswoman said two men were seen running away from the bomb-laden car after it crashed through the barriers of the province`s policing supervision board shortly after 7 pm (1900 GMT) on Saturday.
Half an hour later, a small explosion went off inside the vehicle.
"Police believe at this early stage that the device only partially exploded. It had contained some 400 pounds of explosives," she said.
"Had this device functioned as the terrorists planned, there would certainly have been widespread damage and destruction. It is also very probable that this `no warning` device would have led to very serious injury or loss of life."
Northern Ireland police chief Matt Baggott called it "a reckless act -- not just in doing damage but also the potential loss of life."
Northern Ireland has been largely peaceful since the 1998 Good Friday agreement paved the way to powersharing, after three decades of bloodshed between pro-British Protestants and Catholic opponents of British rule.
But the killings of two British soldiers and a police officer in March this year -- the first of their kind in about a decade -- highlighted the renewed threat posed by dissident paramilitary groups.
"Very clearly these people are trying to undermine the progress that has been made in Northern Ireland in recent years," said Britain`s Minister for Northern Ireland Affairs, Paul Goggins, reacting to Saturday`s failed car bomb.
"When attacks like these happen, it brings people together with the strong message that these dissidents will not succeed," he said. "They are a small minority, they are reckless and criminally intent."
Baggott said: "The terrorist situation is severe. We have substantial resources being put into investigating and thwarting these attacks."
Three men were arrested in relation to the shooting incident at Garrison in the west of the province, and another over the border in Dooard.
"Police believe they foiled a planned terrorist attack," a spokeswoman said.
"Two shots were fired by police, and at least one by terrorists."
Previously, on September 8, Army experts defused a 600-pound (270-kilo) roadside bomb near the Irish border, averting what police called a potential "devastating" explosion.
Three days later, a car was damaged in an explosion carried out by dissident Republicans outside the home of a police officer`s parents, while a pipe bomb was made safe near the officer`s sister`s house.
On October 16, the partner of a Northern Ireland police officer was slightly injured when a bomb exploded under her car in Belfast. Six days later, an explosive device went off inside a British Army reserve barracks.