Security forces defused a powerful bomb found inside a rubbish bin near the United States Embassy in Manila early yesterday morning, in what the Philippine police chief said was an "attempted act of terrorism".
Police Director-General Ronaldo de la Rosa told a news conference that a small group of militants sympathetic to terrorist group Islamic State in Iraq and Syria (ISIS) could have been responsible.
"This is an attempted act of terrorism… We can theorise that this was a diversion to weaken our operations," he said.
The military has, since Sunday, been pounding positions held by the Maute militant group in a remote town in Lanao del Sur province, some 840km south of the capital Manila, in the war-torn southern island group of Mindanao.
The Maute group has pledged allegiance to ISIS.
Major Filemon Tan Jr, spokesman for the Western Mindanao Command, reported that 19 Maute fighters had been killed and 13 soldiers wounded.
President Rodrigo Duterte yesterday said "the intelligence community advised me that ISIS has connected with... Maute, that is waging war now in Lanao".
Security officials had previously downplayed ISIS' presence in Mindanao.
Mr De la Rosa said the bomb recovered near the US Embassy had the same "signature" as the one that exploded on Sept 2 at a popular night market in Davao, Mr Duterte's home city, which was blamed on Maute.
The attack left 15 dead.
The explosives recovered yesterday came from an 81mm mortar shell, a 9-volt battery, a mobile phone, a switch and a blasting cap, he said.
Had the bomb exploded, the blast would have covered a radius of 100m.
A witness said he saw a man in a taxi throw a carton box into a rubbish bin on a pavement 200m across the US Embassy at around 2am yesterday. A street cleaner discovered the bomb inside the box at 6am.
Police did not say why the bomb did not go off.
The US Embassy had no immediate comment.
Business there continued as usual, with dozens queueing outside for visa applications.
Mr De la Rosa slammed speculation that the attempt to bomb the US Embassy was part of a bigger government plot to justify the declaration of martial rule.
Since the September bombing in Davao, the Philippines has been under what is termed a "state of lawlessness", allowing the military to support the police if required by the President.
That has led to frequent speculation that martial law could be declared to support Mr Duterte's deadly war on drugs, something his office has repeatedly dismissed.
"The government will not use any incident that could cause undue harm to the public just to declare martial law," said Mr De la Rosa.
Bombs had been found near the US Embassy before, but all had either been safely removed or defused.
In 1995, police accidentally came across a bomb being put together by Ramzi Yousef, mastermind of the 1993 World Trade Center bombing in New York, at a hotel just a kilometre away from the embassy.
But that was meant for a plot to assassinate visiting pope John Paul II.