The fires on Sunday happened just hours after a car bomb went off in the centre of Banbridge, 20 miles south west of Belfast.

The damage could cost millions

Dissident republicans opposed to the peace agreement have been blamed for the destruction.

The incidents have heightened demands by some unionist MPs for the Sinn Fein president, Gerry Adams, to be excluded from an executive in charge of the new Assembly until violence ends for good.

Lagan Valley Ulster Unionist MP Jeffrey Donaldson said: "It is clear we are a long way from peace in Northern Ireland."

BBC Ireland Correspondent Tom Coulter's report on the attack

Virtually every shop window in Newry Street, as well as neighbouring Bridge Street in Banbridge was blown out by the force of the explosion.

The RUC said 35 people had been treated in hospital following the bomb.

Repair costs in Banbridge however are expected to run into millions of pounds.

35 people were admitted to hospital

The RUC said two telephoned warnings had given them only 20 minutes to clear the busy shopping street before the bomb - estimated to contain about 500 pounds of explosives - detonated.

The Secretary of State for Northern Ireland, Mo Mowlam, visited Banbridge soon after the blast. She spoke with the emergency services there and traders whose premises were badly damaged in the explosion.

Afterwards she said: "This was an appalling outrage. The damage is extensive and it is a miracle no one was killed."

'Cowardly attack'

Dr Mowlam earlier condemned the attack as cowardly and said: "Those responsible have no concern for the lives or livelihood of those living in the town.

"Many people could have been killed or seriously injured by this terrorist attack and it is only through the speedy and efficient action by the security forces that a tragedy has been averted."

The remains of the Vauxhall Cavalier can be made out in this picture from the scene of the blast

Witnesses said police officers had been running around frantically trying to evacuate the area when the car bomb, left outside a shoe store in Newry Street, went off just before 5pm local time.

Police said the bomb was in a Vauxhall Cavalier car abandoned in Newry Street - close to where a bomb was made safe earlier this year.

Dissident republicans opposed to the peace process were blamed for that attack, and a number of groups are continuing to oppose the ceasefire.

No organisation has claimed responsibility for the latest explosion although the same dissident groups are already being blamed.

The people of Banbridge have again become targets

Dr Mowlam said: "It is unclear yet who has perpetrated this terrorist attack but let me make it clear, if it has been carried out by a group not specified in the prisoner release legislation I take it very seriously indeed."

The town of Banbridge has been a target in previous years.

In April 1994, a bomb hidden inside a van left a police officer in hospital with leg injuries.