As of Saturday, the death toll has reached 76 with the largest loss of life on a tiny forested holiday island that was hosting the annual summer camp for the youth wing of Norway's ruling Labour party.
The blast tore at the facade of the 17-story central government building, blowing out most of the windows and scattering shards of metal and other debris for hundreds of yards.
"It exploded -- it must have been a bomb. People ran in panic... I counted at least 10 injured people," said bystander Kjersti Vedun, who was leaving the area of the blast in Oslo.
Three hours later a gunman opened fire at a youth camp on the island of Utoeya north-west of Oslo.
NRK reporter Astrid Randen quoted witnesses as saying the man, described as "tall, blond and Nordic-looking" and speaking Norwegian, wore a police uniform and summoned youth at the political gathering to gather around him before he "just executed them."
"I saw young people running around, jumping into the water," Kristine Melby, who lives across the narrow channel on the Norwegian mainland, told Al Jazeera television. "We heard people screaming."
Many sought shelter in buildings as shots echoed across the island, ran into the woods or tried to swim to safety.
"There was a lot of shooting ... We hid under a bed. It was very terrifying," a young woman at the camp told British Sky television.
A man arrested at the scene is identified as 32-year old Anders Behring Breivik.
He is described as an ethnic Norwegian with links to "right-wing extremist groups in eastern Norway."
Police said they have linked the youth camp shooting and Oslo bombing.
Breivik is believed to have acted alone.
Friday's attack comes just over a year after three men were arrested on suspicion of having links to al Qaeda and planning to attack targets in Norway.
Violence or the threat of it has already come to the other Nordic states: a botched bomb attack took place in the Swedish capital Stockholm last December and the bomber was killed.
Denmark has received repeated threats after a newspaper published cartoons of the Prophet Mohammad in late 2005, angering Muslims worldwide.
The failed December attack in Stockholm was by a Muslim man who grew up in Sweden but said he had been angered by Sweden's involvement in the NATO-led force in Afghanistan and the Prophet Mohammad cartoons.
That attack was followed weeks later by the arrest in Denmark of five men for allegedly planning to attack the newspaper which first ran the Mohammad cartoons.
In July 2010, Norwegian police arrested three men for an alleged plot to organize at least one attack on Norwegian targets and said they were linked to individuals investigated in the United States and Britain.
John Drake, senior risk consultant at London-based consultancy AKE, said: "It may not be too dissimilar to the terrorist attack in Stockholm in December which saw a car bomb and secondary explosion shortly after in the downtown area.
"That attack was later claimed as a reprisal for Sweden's contribution to the efforts in Afghanistan."
Political violence is virtually unknown in a country known for awarding the Nobel Peace Prize and mediating in conflicts, including in the Middle East and Sri Lanka.