The Pakistani Taliban claimed responsibility for the attempted car bomb attack in New York's Times square, a statement on an Islamist website said today.
Police, tipped off by a street vendor, found the crude but powerful bomb in a sport utility vehicle when the entertainment and shopping area of Midtown Manhattan was packed with tourists and theatre-goers.
The statement said it was to avenge the killing of two Islamists and "Muslim martyrs".
"The Pakistani Taliban announced its responsibility for the New York attack in revenge for the two leaders al-Baghdadi and al-Mahajer and Muslim martyrs," said a statement on a website commonly used by Islamists.
US Homeland Security secretary Janet Napolitano earlier said the bomb was a potential terrorist attack.
"We're taking this very seriously," Napolitano told CNN's "State of the Union" program. "We're treating it as if it could be a potential terrorist attack."
Ms Napolitano and other officials have not said whether the suspects could be Americans or foreigners. No claim of responsibility has been made public and police have said no motive or suspect has been identified.
Times Square was evacuated yesterday evening and largely reopened to vehicles and pedestrians just after 5am (0900 GMT) today.
New York mayor Michael Bloomberg told a news conference that "we have no idea who did this or why." He said the failed bomb - made of propane, gasoline and fireworks - appeared to have been made in an amateurish manner.
"Luckily, no one is hurt, and now the full attention of city, state and federal law enforcement will be turned to bringing the guilty party to justice in this act of terrorism," New York governor David Paterson said in a statement.
US president Barack Obama commended the "quick action" by New York police in dealing with the incident and said they had done "excellent work" in responding.
The bomb was discovered at around 6.30pm (2230 GMT) in the vehicle parked on 45th street and Broadway with its engine running and hazard lights flashing, officials said. It had Connecticut license plates that did not match the vehicle.
The bomb squad removed and dismantled three propane tanks, consumer grade fireworks, two filled 19 litre containers, two clocks, batteries in each of the clocks, electrical wire and other components.
A locked metal box resembling a gun locker had also been removed and taken to a safe location to be detonated, he said.
"This wasn't make believe. This wasn't a false alarm. This was the real deal - to hurt people," said fire commissioner Sal Cassano, adding that the force of the bomb had it gone off could have taken down the front of a building.
New York has remained on high alert for another attack since the September 11th, 2001 attacks in which hijacked airliners toppled the World Trade Centre's twin towers.
Last year police said they thwarted a plot to bomb the New York subway system. Two men have pleaded guilty in the case.
Mr Kelly said the vehicle had tinted windows and was seen on police surveillance cameras travelling west along 45th street and that police were now attempting to examine footage from other cameras in the area.
Mr Bloomberg said authorities had spoken to the man who owned the vehicle's license plates. The man said the plates belonged to a truck that he had sent to a junk yard and Bloomberg said police were now attempting to speak to the junk yard owner.
In Washington, FBI spokesman Richard Kolko said the Joint Terrorism Task Force has responded along with the NYPD.
Reuters