The police have said a large car bomb' intercepted on the outskirts of Armagh City on Tuesday morning was primed and ready for use.
Officers said there was several hundred pounds of explosives in the device and that it was large enough to cause death and destruction on a large scale.
It is understood a police patrol in the Killylea area spotted a white Vauxhall car stopped at the side of the Knappagh Road in the early hours of Tuesday.
One man was arrested and the area was cordoned off until Army bomb experts could examine the car at first light.
Local houses were also evacuated.
The police have blamed dissident republicans.
Dissident republican groups, including the Real IRA and Continuity IRA, are opposed to the Good Friday Agreement and the political institutions.
Trigger mechanism
The army carried out a controlled explosion on the bomb.
PSNI Superintendent Bob Moore said: "We are dealing with a large home-made explosive device which consists of home made explosives in the boot of a car.
"A trigger mechanism was found on the front seat."
The area remains cordoned off.
-- Anonymous, November 20, 2001