Police in Limassol arrested a 32-year-old man in connection with a car bomb on Tuesday morning.
The car belonged to a company and was used by a 48-year-old employee. At the time of the blast, the vehicle was parked in an apartment building lot in Mesa Yitonia.
The blast occurred at around 2.45am, starting a fire. Police said it had been caused by a high explosive improvised device. Damage to the car was extensive.
The windows of two houses nearby were also damaged.
The suspect, who appears to have personal differences with the 48-year-old, denied any involvement.
It was the second car bomb at the same place inside 20 days but police do not think the two are related.
Investigators were looking into two other possible scenarios – either that the first bomb had been placed at the wrong car, or someone was targeting the buildings residents.