A car bomb went off in a busy shopping area just after 3pm, injuring hundreds of people. So many required attention that at one stage medical services were in danger of being swamped with casualties.
Among those who suffered horrific injuries were four Spanish exchange students who had limbs amputated. Others were treated for shrapnel injuries and wounds caused by flying glass.
News flashes were broadcast asking all doctors and medical staff in the area to report to the scene as soon as possible. Later, Tyrone County Hospital said it was dealing with dozens of seriously injured people.
A local businessman, Sean Conway, who was at the scene, said: "I could see at least five or six bodies and a lot of injured people, and people running everywhere screaming and crying."
One RUC officer, his uniform covered in blood, as he helped with the injured, said: "It was dreadful. We were picking up bodies and bits of bodies."
The attack was suspected of being the work of renegade republicans who in recent years have broken away from the mainstream IRA and formed dissident groups, styling themselves "Real IRA" and "Continuity IRA". These have staged a stream of car-bomb attacks in recent months. Some such incidents have caused widespread damage to urban centres, but until yesterday, none had taken life.
The Prime Minister, Tony Blair, condemned the attack as an "appalling act of savagery and evil" by people determined to wreck the peace process.
In a statement, he pledged that the bombers would be pursued "to the utmost" to bring them to justice. "These people will never be allowed to win." Mr Blair was expected to make a television statement later last night.
Mo Mowlam, the Northern Ireland Secretary, was reported to be breaking off her holiday to fly to Ulster in response to the fresh crisis.
William Hague, leader of the Conservative Party, said he stood "full square" behind the Government and the security forces in bringing the perpetrators to justice. "This is an act of unspeakable barbarity which was designed to murder and injure innocent people," he said.
Vincent Campbell, a local Social Democratic and Labour Party councillor, said: "This is the busiest junction in Omagh. All I can say is that everybody is standing aghast. This is festival time in Omagh - all of the estates have their festivals going at this present moment and suddenly this has gone off in the middle of the town."
Nigel O'Kane, landlord of the Monument public house, said: "It was less than 100 yards away from the biggest supermarket area, on the biggest shopping day of the week. There's a lot of people looking for loved ones who might have been shopping.
"It's just carnage, the worst possible place to get a bomb. There's no way you can protect a town from indiscriminate bombing like this. It's just so unlucky for us and the poor people who were down there."
Police said an inaccurate warning had been given in a telephone call shortly after 2.30pm. This warned of a bomb at the courthouse in Main Street. This area was successfully evacuated but the explosion took place several hundred yards away at approximately 3.10pm at the junction of Market Square and Dublin Road.
Northern Ireland has been comparatively quiet in terms of both violence and political activity since the fire-bombing incident which killed the three young Quinn brothers at the height of the Drumcree marching controversy on 12 July. Yesterday brought it back face to face with the reality that, although the peace process has brought about a major reduction in violence, terrorist acts still have the capacity to take life on a major scale.
The attack recalled memories of the 1987 "Poppy Day" explosion in which 11 people were killed in Enniskillen, Co Fermanagh. An IRA bomb went off without warning as people waited for a Remembrance Day ceremony. The attack is widely regarded as one of the worst single incidents of the Troubles, and may have been a highly significant political turning point.
John Prescott, the Deputy Prime Minister, said: "You cannot help but feel utter contempt for such a cowardly act."
Mr Blair, holidaying in Italy, said: "It is so terrible, so heart-rending that so many innocent people are killed, the blood of people who are simply going about their daily lives shed by a senseless, brutal act of savagery. It is impossible to contemplate."
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