A spokeswoman for the Civil Guards told the AFP news agency that the two officers killed in Thursday's attack had been inside a patrol car parked outside the El Foc barracks in Palmanova when the bomb exploded, just before 1400 (1200 GMT).
Marian Hens BBC News, Madrid
Eta is trying to present this as a sign of the group's renewed strength.
After repeated arrests of its leadership and the success of the anti-terrorist campaign launched by the Spanish and the French authorities, the armed Basque separatists had been gradually losing ground.
In recent years, the organisation has also seen its political base eroded and support in the Basque county drop to the lowest level in the group's history.
Several other people were also said to have been injured by the blast, which happened in a busy area where there is also a post office and health centre.
Police said a second device was found under a civil guard vehicle at another nearby barracks.
Spain's Interior Minister Alfredo Perez Rubalcaba blamed Eta for the attack.
"We have always known that they are murderers and savages. Always," he told TVE Internacional.
"Today, we also know that they are murderers, savages and crazed.
"And this does not make them stronger, but it undoubtedly makes them more dangerous," he added.
The moment after the Majorca blast
In the hours after the blast, police ordered that no planes, ships or pleasure boats leave the island while they hunted for the bombers. Dozens of outbound flights were affected.
The car bombing in Burgos caused extensive damage but no deaths
Incoming flights were diverted.
British tour operator Thomson Holidays was forced to call two flights back to the UK and said two others were being diverted to other Spanish islands.
The move comes at the height of the tourist season. Majorca depends heavily on tourism. Its airport in Palma is Spain's third busiest.
The airport was later reopened.
The European Union's Commission expressed its "firmest condemnation of the barbaric attack" and said Spaniards had its "complete solidarity... in the fight against terrorism".
Dave Wilkinson, who was having lunch at a restaurant in the area at the time of the blast, told the BBC that he had heard a loud explosion and seen a black plume of smoke rising.
"We ran around the corner to see what had happened and saw a car on fire parked on the left-hand side of the road," he said.
"Across the road, there was a man lying on the floor and another two people with him doing CPR.
"A police car came and officers said to get back as there may be another bomb and that the area wasn't safe. Two or three helicopters were circling over the area," he added.
Security sources told the Spanish news agency, Efe, that the bomb had probably been planted underneath the patrol car and had been detonated when the officers got into the vehicle or turned on the engine.
A similar method was used in Eta's last fatal bombing in June, when a senior police officer was killed by a car bomb in the city of Bilbao, in Basque country.
Thursday's attack was the deadliest since two Spanish undercover policemen were shot during an operation in south-western France in December 2007.
The powerful car bomb blast which hit a police barracks in Burgos on Wednesday caused extensive damage but only minor injuries.
There was no claim of responsibility, but local politicians and police were quick to blame Eta, saying it was an attempt to take lives and cause maximum damage.
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