The device was let off on the corner of Edward and Stewart streets about 9.05pm.

Residents took to the streets after the loud explosion, which shook windows on homes three blocks away.

Tracie Johnson lives almost three blocks away.

She said she heard the loud bang just after 9pm.

"It shook the windows," she said. "The kids came running out of their rooms."

Investigating officer Sergeant Bill Alford of Horsham said he could not understand why somebody would want to detonate an explosive in the middle of a suburban intersection.

"It was a stupid, reckless act," he said.

"If there had been someone walking past or somebody had driven a motor car over it, someone could have been seriously hurt.

"There was quite a bit of force involved."

Horsham police have since recovered the wick and pieces of the bomb's shell, but are still searching for those responsible.

Sgt Alford said the explosive had been deliberately placed in the intersection.

"The device had been made out of a metal tube, about a foot long and 90mm round," Sgt Alford said.

"It had been packed with some sort of explosive device and a wick."

There was nothing to indicate that the explosion was anything but an isolated incident.

But Sgt Alford said he was concerned such a dangerous incident ever took place.

"I'm concerned that someone would put no great weight into what they've done and run away from the scene and leave it there for some unsuspecting person," he said.

"Even one of the people who set it could have been hurt."

He urged any person involved in or with information about the incident to come forward and call Horsham police on 53829200.