Since most modern cities have an extensive network of underground systems a sufficient underground explosion would reek even more havoc than an above ground one and possibly with just as lethal consequences.
Most of our catastophic recovery missions and deaths (coalition forces) come from IEDs placed in sewer lines and command detonated. It doesn't matter if you are driving a Ford Explorer or a Tank as the the explosion rips through the underbelly of the vehicle. There usually isn't much left. The counter to this TTP (tactics, techniques, & procedures) are the MRAPs (man I hate acroynms, Mine Resistant Ambush Protected) which are designed to increase the survivablity of the crew in the event of an undercarriage explosion.
They come up with IEDs, we up-armor our vehicles. They went away from command wire detonations because we would find the triggerman. So they went to Radio Control and Cell Phone initiated. We countered that with various ECM systems. They went to EFPs and AAIEDs (thanks Iran), we counter with IR defeating equipment. They go to placing IEDs in sewer systems, we go with MRAPs. They come up with something new, we come up with a way to defeat it, and they come up with something new...
So I guess the short answer is the bad guys can target us, but not civilians effectively through the sewer systems. VBIEDs are still the weapons of choice.
*EDIT*
Nemesis, the problem is logistics. They need to get the explosives from their factory to the target. The sewer systems simply don't allow them the access. They either need to drive it there, or attempt indirect fire. They use all their rockets and mortars on our Combat Outposts, Forward Operating Bases, and Joint Security Stations though.
Edited by Tal, : responding to Nemesis
News Media: Snatching defeat from the jaws of victory 1 negative report at a time.