Police say a device found during the security operation at Currynierin was designed to kill.
Superintendent Mark McEwan has confirmed that police had discovered a viable bomb which he said could very well have killed police officers or members of the local community.
“It is a bomb and it is designed to kill people,” he said.
“In the context of Northern Ireland we believe that the bomb was placed there with the intention of killing police officers.
“I have also to say that it was left in a position close to housing and there is every possibility that it could have killed members of the community.”
Supt McEwan said the security operation was on-going last night but he was confident residents would be let back into their homes at some stage in the evening.
Residents were denied access to the estate, which has only one entrance, as the security operation got under way on Monday evening.
Other people were advised to remain in their homes. One resident told the Sentinel that he climbed over two eight-foot high fences to get milk formula for his three-month old son.
“My wife was going off her head,” he said.
“It was an absolute nightmare and there is no sign of it ending.
“There are a lot of elderly people in the estate who have been evacuated because of this threat and I know there is another couple with new born twins who are also affected by this.
“It is a disgrace, an absolute nightmare.”