The bomb had a remote detonator and the ability to cause mass casualties, according to an official familiar with the case who spoke on condition of anonymity because he was not authorized to release information about the investigation.
The bomb was defused without incident Monday but unnerved residents of Spokane, especially those who took part in a parade whose theme was steeped in peace and nonviolence.
An official familiar with the case that spoke to the Associated Press on the condition of anonymity said the bomb was.
Investigators have no suspects but are following up on "fruitful leads" they've received from the public, said Frank Harrill, special agent in charge of the Spokane FBI office. He declined to elaborate.
The attempt on the day set aside to honor the slain civil rights leader raised the possibility of a racial motive in a region that has been home to the white supremacist group Aryan Nations.
"The confluence of the holiday, the march and the device is inescapable, but we are not at the point where we can draw any particular motive," Harrill said.
Harrill said the black Swiss Army backpack has been shipped to an FBI lab in Quantico, Va., for analysis. In addition to the bomb, the backpack contained two T-shirts that authorities were analyzing for clues.
Officials have praised as heroes the three city workers who spotted the backpack about an hour before the parade was to start. Harrill said they looked inside, saw wires and immediately alerted law enforcement.
The bomb was carefully placed on a metal bench with a brick wall behind that would have directed shrapnel toward Main Street, where marchers were expected to pass, investigators said.
No one has claimed responsibility for planting the bomb, Harrill said.
The FBI released a photo of the backpack as it offered a $20,000 reward for information from the public. Also released were pictures of the T-shirts found in the pack. There was a gray T-shirt with writing for the Stevens County Relay for Life race last June. Stevens County is just north of Spokane County. The other dark T-shirt said "Treasure Island Spring 2009."
Investigators are seeking anyone who took photographs or video in the area between 8 a.m. and 11 a.m. Monday.
Monday's parade route was changed after the bomb was found, and most of the several hundred people who marched in the annual event did not know about the device, said Liz Moore, one of the marchers.
"No announcements were made at all," Moore said. "It seems like a specific effort was made not to alarm people."
Harrill called the bomb an act of domestic terrorism.
Spokane County Commissioner Mark Richard, who spoke at the King celebration and did not learn of the bomb until later, expressed concern about the number of people who could have been injured or killed if it had detonated.
"Hundreds of people, including children, gathered to celebrate and recommit their lives to the cause of human rights," Richard said.
Spokane has 200,000 residents and is about 100 miles south of the Canadian border.
Another explosive device was found March 23 beside the Thomas S. Foley U.S. Courthouse in downtown Spokane. No arrests have been made in that investigation, and agents didn't know if the two incidents were related, Harrill said.
The Spokane region and adjacent northern Idaho have had numerous incidents of anti-government and white supremacist activity during the past three decades.
The most visible was by the Aryan Nations, whose leader Richard Butler gathered racists and anti-Semites at his compound for more than two decades. Butler went bankrupt, lost the compound in a civil lawsuit in 2000 and died in 2004.
In 1996, white supremacists placed a pipe bomb outside City Hall in Spokane. The bomb exploded, blowing out a window and sending nails and screws across the street.
In December, a man in Hayden, Idaho, built a snowman on his front lawn shaped like a member of the Ku Klux Klan holding a noose. The man knocked the pointy-headed snowman down after getting a visit from sheriff's deputies.