The bomb - which contained up to 40kg of homemade explosive - blew up near Ealing Broadway railway station seconds after midnight.
The area - which is lined with bars and restaurants - was still busy with late night drinkers as the car exploded, sending up a sheet of flame and smashing numerous shop windows in a 200m radius.
Click here to see a map of the blast area
It blew up minutes before 150 people were about to leave a karaoke night at the nearest pub.
The attack, suspected to be the work of the Real IRA, comes at an extremely sensitive time in the Northern Ireland peace process.
The group has stepped up its campaign at a time when the parties are considering whether to accept a political package from the British and Irish governments.
On Wednesday a 20kg car bomb was defused at Belfast International Airport.
A threatening phone call was made at 2333 BST on Thursday to an on-call doctor service and the device exploded as police were searching for the vehicle, he said.
'Barbaric act'
The car, a grey Saab 9000 turbo five door with the registration E304 HPY, is thought to have been placed at around 2300BST.
"We are fortunate indeed that we are not dealing with mass murder," Mr Fry said, describing the planting of the bomb as a "barbaric act".
Mr Fry was unable to confirm whether the timing of the bomb was linked directly to the peace process or even the Queen Mother's 101st birthday.
"We know this is a difficult time as far as the peace process is concerned
and as such perhaps we were more likely to see an attack at this time by a group
who are determined to derail the peace process."
Non-existent road
Addressing speculation that the bomb might have been placed to coincide with the Queen Mother's birthday on Saturday, he said: "We hope not.
"But we are dealing with people who do not necessarily think in the same way as we do and with something we would wish to celebrate perhaps their intentions are something different."
London Mayor Ken Livingstone warned people to be "extra vigilant" over summer.
"The fact that the terrorists gave the police misinformation clearly shows their total disregard for members of the public."
Mr Fry said police were told the bomb was in Ealing Broadway Road, which does not exist, and no time of detonation was given.
A spokesman for the hospital said no-one had life-threatening injuries but two could be kept in over the weekend.
Mr Fry said the bomb was about twice the size of a taxi bomb - blamed on the Real IRA - that detonated outside BBC Television Centre in March.
"This was a calculated evil act by people who are seeking to maim and kill," Mr Fry added.
The area around Ealing Broadway shopping centre was also hit by flooding after the blast, with a burst pipe leaving up to two feet of water gushing through the streets.
Group blamed
The Real IRA first came to international prominence in August 1998 with the
Omagh bomb which killed 29 people and wounded 200 others.
Since then, the group has been blamed for a series
of explosions in Northern Ireland and in mainland Britain.
These included a
rocket-propelled grenade attack on the London headquarters of MI6 in September 2000, and a taxi bomb outside BBC Television Centre in White City
in March of this year.
Police hotline number: 0800 789321
Deputy Assistant Commissioner Alan Fry, head of the Metropolitan Police's anti-terrorist branch said he believed the blast was the work of Irish dissident republican terrorists with similarities to previous Real IRA attacks.
Car bomb
Grey Saab 9000 turbo five door
Registration E304
HPY
Possibly parked around 2300BST
Warning given at 2333BST
40kg device was twice size of March's BBC bomb
"I am satisfied it is an evil deed committed by a dissident republican group and it has similarities to other attacks we have suffered in the capital and in Northern Ireland perpetrated by the Real IRA."
Blast casualties
One man with severe head injuries
Another awaiting an operation on broken shoulder
Third man suffering chest injuries and deafness
Woman treated for back injury
Two people released
Policewoman suffered minor cuts
Seven people, including a woman police officer, five men and a woman, were admitted to Ealing Hospital. Three were quickly released.
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Related to this story:
Survivors' tales of terror
(03 Aug 01 | UK)
Blair condemns bombers
(03 Aug 01 | UK)
Dissidents blamed for airport bomb
(02 Aug 01 | Northern Ireland)
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