The Northern Ireland peace process is facing its biggest terror threat in 12 years.

Renewed violence in the province has led to warnings that large-scale terrorism may return to blight the country.

Late Thursday, two people were injured after a huge car bomb exploded outside a police station in Newtownhamilton in County Armagh.

The bombers peppered the building with gunfire as they fled the scene.

It was the second attack at the same police station. Ten days ago, a car bomb was defused closing down the village for 24 hours.

The security services in the North are warning that the threat posed by dissident republican organizations like the Real IRA is at its highest level in over a decade.

The splinter groups are opposed to the 1998 Good Friday Agreement and their last major wave of violence led to the Omagh bombing that same year in which 29 people were killed.

The security officials say that the Real IRA and Continuity IRA have banded together to share bomb-making expertise.

Sinister terrorists are also believed to have come out of "retirement" to advise the dissident groups on technical know-how.

Northern Ireland's chief inspector Sam Cordner said that these groups were "hell-bent on killing police officers."

"There is little doubt that this bomb is the work of one of the small militarist factions," Conor Murphy, a Sinn Féin MP and former Provisional IRA member said.

"These people are opposed to the peace process and have no strategy to bring about political change or deliver Irish unity. This bomb sends a message that the peace process needs to be defended."

Northern Ireland's first minister, Peter Robinson of the Democratic Unionist Party, said the Newtownhamilton bombing was an "evil and cowardly attack" but would not stop Northern Ireland "continuing the road to peace."

Terror fears: Security forces in the North of Ireland fear return of large-scale terrorism