It has significantly decreased the chances of success of the peace initiative launched by John Hume of the SDLP and Sinn Fein's Gerry Adams; it has raised the question of how much control and influence Mr Adams has over the military members of his movement; and it has planted doubts about whether the IRA has any real interest in the process.
The Shankill Road is the heartland of loyalist Ulster. Sandwiched uneasily in north- west Belfast between the republican Ardoyne and Falls Road districts, it has for a quarter of a century been a source and a target of violence.
As well as coming under sporadic republican attack, its back streets have supplied more loyalist paramilitary recruits than anywhere else in Northern Ireland.
Loyalist groups are part of the environment. Organisations such as the Ulster Defence Association and Ulster Volunteer Force run pubs, drinking clubs and have offices thinly disguised as historical societies and prison welfare associations.
Such groups are illegal, but operate behind the fig-leaf of cover names: everybody knows the names of the big boys who have made their names as paramilitary leaders, assassins, or both.
Everybody knows that these groups are hardened to violence, most of their targets being Catholics selected at random or for convenience. And they know, as sure as night follows day, that republican attacks on this community will bring retaliation, usually against uninvolved Catholics.
Even in ordinary times such an incident would have been surprising, given that the IRA persistently argues that it tries to avoid civilian casualties. In this instance such casualties were inevitable. A device powerful enough to kill any loyalists in the UDA office above the fishmonger's would clearly have killed people in the shop as well.
The context of a 'peace process' involving Mr Hume and Mr Adams makes the incident even more baffling. Mr Hume has said he believes the initiative is the best hope in years of achieving lasting peace, while Mr Adams has adopted some of the SDLP leader's language of conciliation and spoken of his personal desire for peace.
The process is at a delicate point. In the next five days John Major and the Northern Ireland Secretary, Sir Patrick Mayhew, are due to have meetings with Irish ministers at which they will be officially given details of the Hume-Adams plan.
Sinn Fein has already accused Sir Patrick of being 'arrogant, clumsy and gratuitously insulting' in his initial responses to the initiative. Mr Adams, who had clearly been hoping for a reasonably positive reaction from London in the next week, will be well aware that yesterday's bloodshed makes this much less likely.