People light candles at the scene of a massive car bomb attack in Karrada. Hadi Mizban/AP

On July 3, 292 Iraqis were killed during ISIS' deadliest attack thus far.

In a crowded street in Baghdad's Karrada neighborhood, a vehicle-borne improvised explosive device, or VBIED, detonated after midnight, causing nearby dwellings to be engulfed in flames.

Many residents were trapped inside the inferno — it was estimated that 20 to 30 people died from the initial explosion.

But investigators at the scene are now concerned with another potential threat: The terrorist group may have developed and used a new type of bomb.

"We've never seen it before, and it's very worrying," a Western security source in Baghdad told the BBC.

So far, investigators have determined that the type of explosives and the way the chemicals were assembled in the van differed from the traditional methods inside the war-torn country.

This may explain how the explosion from the VBIED had left no distinctive crater, and that the impact from the initial explosion left buildings in the neighborhood still intact.

Explosive experts told the BBC that the chemical composition was unique and that it was difficult to make.

"We are used to big fires, but the chemicals in this bomb were used for the first time in Iraq," said Brig. Gen. Kadhim Bashir Saleh of the Civil Defense Force. "It was unique, strange, and terrible."

Other unnamed experts told the BBC that the blast itself was "as hot as the surface of the sun."

Iraqi security forces and civilians gather at Karrada. Khalid Mohammed/AP

Investigators believe that the bomb-makers, who most likely assembled the explosives in nearby Fallujah, took a formula on the internet and adjusted it to increase its volatility. The adjustments also made the bomb more difficult for Iraqi security forces to detect before the detonation.

ISIS has found considerable success in using VBIEDs for both terror attacks and as a military tactic. A Baghdad police captain previously referred to ISIS bombs as "works of art" because of their precision and ability to cause mass casualties.

Iraqi security forces believe that the majority of ISIS' VBIEDs are constructed in the areas around Fallujah, which was recently retaken by Baghdad from the terror group. In order to help limit the flow of these weapons out of the area and into Baghdad, 40 miles away, Iraq has started to dig a giant trench around Fallujah with the goal to force all traffic onto a single road, in and out of the city, to allow for better screening of vehicles.