Senior Supt. Lester Camba, newly installed police provincial director, said that the rifle grenade was placed inside a plastic bag and left at a stall inside the public market.
Camba said, however, that the incident was simply meant to create fear and that it has no connection the recent bombing in Kidapawan City which killed one person and wounded 36 others.
Meanwhile, police released a suspect in the Kidapawan bombing for lack of evidence.
Inspector Benjamin Mauricio, chief of the anti-vice and intelligence division of Kidapawan PNP, said they only have circumstantial evidence against George Hernan, 27, resident of Estanol Subdivision.
No witness has come forward to say that Hernan was involved in the bombing, Mauricio added.
The police official also denied the suspect is a local recruit of the Indonesian-based militant Jemaah Islamiah, the group suspected to be behind the behind the bombings here.
In an interview, Hernan strongly denied he planted the bomb in front of Imperial Appliance Plaza along Quezon Boulevard. He said he was drinking with some friends when the bomb went off and that he ran away because he was shocked by the explosion.
Hernan was arrested a few minutes after the explosion reportedly for behaving suspiciously.
He threw away his cellular phone in a grassy area in Quezon Boulevard, according to policemen who arrested him.