A loud bang heard in Craigavon on Friday night was staged in order to lure officers towards a “deadly booby-trap device”, the PSNI has said.
Officers were called to the Tullygally Road in the town at around midnight.
A short time later, a Belfast-based newspaper said it had received a call claiming a mortar had been fired at police in the same area.
An explosive device was later found close to a public bus stop near the Alderdale flats.
Police have blamed dissident republicans for trying to murder police officers.
“Although the explosive was designed and set up to look like a fired mortar, it was in fact a booby-trap device,” said PSNI Det Supt Richard Campbell
“In other words, it was designed to explode if moved or touched.”
He said the device, had it exploded, would have “undoubtedly been catastrophic for anyone in the immediate vicinity”.
Police believe the loud bang and phone call “were meant to lure police officers and first responders into the area”.
Det Supt Campbell added that a mortar was not in fact fired, and that “the entire incident was staged in order to bring police into an area where another deadly and unstable device awaited”.
“Although the explosive was designed and set up to look like a fired mortar, it was in fact a booby-trap device. In other words, it was designed to explode if moved or touched,” he said.
On Friday night, the area was busy with “people out socialising, teenagers and residents attempting to simply go about their daily lives”, Det Supt Campbell said.
“This attack was indiscriminate. Whilst there is no doubt in my mind that first responders were the target, the reality is that anyone could have been caught up in the carnage. We are extremely fortunate that the swift actions of those officers who were first on scene meant that there was not serious injury or death.”
In a warning to the public not to approach or touch suspect objects, he added: “This serves to emphasise how important it is that members of the public report to us anything suspicious they find or see, no matter how innocuous they may seem.”
Homes were evacuated in the area following the discovery, with 20 people – including an 80-year-old – moved from their homes in the middle of the night.
The security operation has now ended.