The Chief Constable of the Police Service of Northern Ireland has said dissident republican activity is "extremely high". Mr Hugh Orde was speaking after his officers prevented a bomb attack when they discovered two under-car booby-trap devices near the Border.
Two men are being interrogated by detectives in connection with the find in Co Down on Tuesday night. Police sources said their arrest was part of a major undercover operation against the "Real IRA", involving the British army.
The men aged 35 and 36 were arrested when armed police stopped a car on a secondary cross-Border road known as the Fathom Line, near Newry. They are well known to police, according to security sources. The devices were discovered in a second car, which is believed to have been travelling behind. The driver escaped.
Houses in Newcastle and Castlewellan were searched as part of a follow-up operation.
The PSNI did not disclose what the likely target was this time but Mr Orde said lives had been saved. He said present dissident republican activity was substantial.
"It was extremely high when I took over this job and this is more evidence to support that assessment. I am not speculating at this point as to who the targets may have been but make no mistake, there was an intent to place these devices under cars." He said it was clear that dissident republicans continued to threaten police officers. He stressed his desire to see Sinn Féin encourage its supporters to join the PSNI.
Local Ulster Unionist Assembly member Mr Danny Kennedy said: "This was a significant security operation which highlights once again the level of threat from republicans whether they are dissidents or otherwise." SDLP Assembly member Mr John Fee said those responsible had "no clear political agenda and no community support".