Police sources said that four men had brought a Suzuki Hi-roof having a government number GA-0313 and had parked it near the US Consulate boundary wall.
The Frontier Constabulary staff on security duty asked the occupants of the vehicle to remove it but they did not. They told the security personnel that the vehicle had gone out of order and left in another vehicle soon after on assurance that they would bring a mechanic to find out the fault and put it in order.
The security men did not find the answer plausible and called in rangers and police. On checking, it was found that the vehicle was fitted with a fibre-made tank filled with 750 litres explosive chemical containing hydroproxide and nitrogen.
The tank was fitted after removing the central seat.
Police said that a timer, usually used in washing machines, was also fitted with the tank. The bomb disposal squad defused the timer. The vehicle was later shifted to a playground in front of the Rangers' Headquarters.
Police said that the Suzuki was snatched at gunpoint from Baloch Colony on Sunday evening.
The car snatchers had also fired at and injured the owner of the Suzuki on his resistance. A government number plate GA-0313 replaced the original numberplate of the Suzuki CA-8501.
Police has released sketches of car snatchers.
AFP ADDS: The United States praised Pakistan on Monday for preventing a huge car explosion outside the American consulate in Karachi, saying it was a reflection of effective counter-terrorism co-operation.
US State Department spokesman Adam Ereli said in Washington the authorities had not found those responsible or heard of any claim for the possible attack "but we would praise the very alert and courageous action of all those involved in detecting and responding to what could have been a horrific explosion.
"I think this shows that counter-terrorism co-operation is effective and can work," he told a media briefing.
Asked whether it was a possible warning in advance of Secretary Powell's visit, Ereli said Karachi had been the "scene of bombings for some time, so there's unfortunately a pattern of this kind of activity.
"So I think that should be taken into account when you're sort of trying to figure out why," he added.
But Ereli said Powell, who arrived in India on Monday at the start of a South Asia trip focusing on the peace process in the subcontinent and on nuclear proliferation, would go ahead with his Pakistan visit.