The device exploded early today inside the entrance to the Everglades, one of the longest operating hotels in Northern Ireland's second-largest city.
Hotel staff said a masked man tossed the suspected bomb into the hotel, then fled. The bomb exploded as British Army experts were deploying a remote-controlled robot to defuse it.
No group has claimed responsibility, but police and politicians say Irish Republican Army hard-liners opposed to Northern Ireland's peace process are suspected. IRA factions are particularly active in Londonderry.