rioting erupted as tensions continue over the decision to stop flying the union flag above Belfast city hall.
A hijacked vehicle was set alight at Shaftsbury Square near the city centre last night as police in riot gear swamped the area.
Officers backed up by two water canon tried to disperse a crowd gathered there to protest against the removal of the union flag from Belfast's city hall.
Around 200 people had gathered for what initially was a peaceful protest but violence erupted after a motorist attempted to drive through the crowd, knocking several people over.
Witnesses said some of the crowd then attacked the car and the occupants. A husband and wife fled the scene.
As police moved in to protect the couple, officers came under sustained attack and another car was set alight.
Water canon were then deployed and one proceeded to spray the burning car before fire engines arrived on the scene.
Earlier, an armour-piercing weapon has been seized by police in Derry during an operation against dissident republicans.
The deadly device was seized on the eve of the visit of US Secretary of State Hillary Clinton to Belfast and the earlier death threats to Alliance MP Naomi Long and Sinn Fein councillor Jim McVeigh.
The homemade weapon consisted of a self-forging warhead, designed to penetrate armour up to four inches thick.
It is the first time such a device has been found in Derry but similar weapons were found earlier this year in Belfast and in Co Tyrone.
Police are satisfied that those responsible for the manufacture of the latest weapon are linked to the new terrorist alliance, that includes members of the Real IRA in Dublin and Derry, as well as the Republican Action Against Drugs group and non-aligned republicans from east Tyrone and Belfast.
Officers think it is likely that the expertise of former Provisional IRA activists was used in making the weapons, which were used frequently by insurgency groups in Iraq and Afghanistan.
Chief Superintendent Stephen Martin, who is PSNI district commander in Derry, said last night that the device was viable and ready for use when it was found in a car stopped by police at Westway on Thursday night.
Three men inside the car were arrested and a fourth man was arrested nearby. The four men are all from Derry and aged in their 40s.
Members of the PSNI's major investigations team were continuing to question them yesterday.
"This is a weapon primarily designed for use against armoured vehicles and my belief is it was intended for an attack on a police vehicle," Chief Supt Martin said.
"It is designed for one purpose only . . . to kill. It has been used with devastating effect in Afghanistan and Iraq and while I am naturally concerned . . . I am delighted that it has been taken off the streets."