The 1,000lb device was left fully primed on a building site in Strabane, Co Tyrone, yards from a hotel packed with 250 guests. Police believe it was intended for a passing RUC patrol, but would have caused huge civilian loss of life if it had exploded.
The bomb attempt comes days after the IRA said it was not involved in a "phoney war" and that there was little hope of a ceasefire before a general election.
It is the latest in a spate of murder bids on police and troops in the past week and further confirms fears that the IRA's campaign of terror has escalated.
Yesterday's bomb was discovered on a building site on the main Omagh Road within 50 metres of the Fir Trees Hotel after a warning call from the IRA.
The hotel, 26 homes and nearby factories were all evacuated. Superintendent Mervyn Hood of the Royal Ulster C onstabulary said: "This was certainly no phoney attack, it was designed deliberately to kill and maim security forces and anyone who got in their way."
He said the device contained between 1000lb and 1500lb of explosives held in three 45 gallon drums with a firing pack and command wires attached.
Hours before yesterday's discovery a police officer was slightly injured when an explosive device was thrown at a patrol in the Co Tyrone village of Pomeroy, an attack described by the RUC as "murderous". In the past week there have also been attacks on police vehicles in Dungannon, Co Tyrone and Lurgan, Co Armagh.
The chairman of Strabane District Council, Edward Turner said he would now have no choice but to advise business people against future investment in the area. "We've had something in excess of 500 bombs here over the years," he said.
In London, security around the House of Commons was noticeably tightened as Downing Street rejected an appeal by Gerry Adams in a fax to John Major for the Prime Minister to authorise official talks with Sinn Fein to "kickstart" the stalled peace process. The Prime Minister's office said it was "hypocritical" of the Sinn Fein president to call for talks with the Government while the IRA was planting bombs and planning terrorist attacks.
The hostile response from Number Ten underlined the anger among ministers at the IRA's warning last week that there would be no renewal of the ceasefire before the election.
"The UK Government is not going to authorise anyone to have discussions with Sinn Fein in the absence of a ceasefire. It is hypocritical to talk about peace when bombs are being planted in Northern Ireland and possibly elsewhere - who knows?" said a Downing Street spokesman.
Andrew Hunter, chairman of the Northern Ireland committee of backbench Tory MPs, said it was up to Sinn Fein to make the first move. But he added: "Dialogue has to be meaningful and based upon an unequivocal restoration of the ceasefire and there is nothing to talk about while the Provisionals are still intent on ... violence."
A Sinn Fein spokesman said: "John Major has said he has new ideas for the peace process, but he wants to leave them until after the election. We would prefer to bridge this gap now rather than have a vacuum for 12 weeks until the election is over."Reuse content