When you talk to Jaffar he will flag this Side-Quest for you - you need to look into the events at the Construction Site that has caused Rais' men to become excited about being able to destroy the Tower. You need to find out what it is and either take or destroy it.
At the Site there is heavy resistance by the patrol - think Assault Rifles, and etc. Now if you HAVE guns already then now is the time to use them. That was why we went to the trouble of doing all the exploring earlier - so that when we get shot at, we can shoot back!
Once you take out the squad you start searching the site - picking locks, looting, and eventually locating the TNT inside the locked shed. The goal changes to Collect the Dynamite for Jaffar - so once you have it return to Jaffar and turn in the TNT.
You get a nice reward and he promises you that Kurt will figure out a way to boost the oomph of the TNT.