Police Chief Vidar Pedersen confirmed last night that the device, initially described as "bomb-like," was an explosive. The police Twitter account said it had been defused or neutralised.
Police would not give any details about the suspect, or further information about the device.
Pederson said the device was found on the street just outside the Groenland underground station, and police swept through the area to remove people from bars and restaurants.
"Every restaurant was being closed," said 23-year-old Malin Myrvold, who witnessed the scene from a fourth-story window. "You could see cops in heavy armour going in every store and restaurant.
Norway was put on high alert after neighbouring Sweden suffered a truck attack in the capital that killed four people and injured 15. The suspect in Friday's attack, a 39-year-old native of Uzbekistan, has been arrested.
It was unclear whether he was also a Swedish citizen or resident or even how long he'd been in the country.
The Norwegian incident happened less than a mile from the government buildings that were damaged in a deadly bomb attack carried out by right wing extremist Anders Breivik in 2011. That bomb and a subsequent gun massacre killed a total of 77 people.
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