Shots were fired at police attending the ongoing security alert in Newry on Saturday night.
A number of officers have been at the scene after a suspicious object was discovered near the railway line between Killeen and Meigh on Friday.
It is understood the gun attack happened around 9.15pm.
There were no reports of any injuries.
In a statement from police, District Commander Chief Superintendent Alisdair Robinson condemned the attack and said:
"This attack was a cowardly attempt to kill police officers in the course of their duty as they investigate a suspicious object that may have the potential to kill or injury not only police but members of the local community"
"Police will continue to deliver a service to the community despite the threat from these criminal terrorists, but we must also be mindful of that threat," he added.
"The people who carry out these senseless acts show a total disregard for their fellow man and are not part of the society within which the majority of people of Northern Ireland wish to live," he continued.
SDLP MLA Dominic Bradley believes dissident republicans are behind this latest attack.
"It certainly looks like the device at the railway line was an attempt to lure officers in and attack them by shooting at them," he said.
"All of us must hold our nerve under these circumstances and allow police to do their work. I think the main way of defeating these people is through close co-operation between the local community and the police force," he added.
A controlled explosion was carried out on what was described as a viable explosive device discovered in a car park in Magherafelt, Co Londonderry, on Saturday.
On Friday, multiple alerts caused widespread disruption across Londonderry, Ballymena, Newry and Belfast.
The security alert in Newry continues.
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