A device was thrown at a property in the Bond’s Place area just before 11pm on Tuesday in an attack.
The PSNI said the incident is being investigated as a possible ‘sectarian hate crime’.
Waterside Councillor Christopher Jackson said: “This was a reckless attack and the device could have maimed or killed anyone in the vicinity.
“The fact that the PSNI are investigating a potential sectarian motive is also very concerning.
“I am making it clear to those responsible for leaving this device that the community in the Waterside does not want this.
“And those behind such incidents need to stop.”