defuse, diffuse

Defuse or defuse means to render an explosive device inoperable by removing the fuse that was meant to set it off--
The police cordoned off the area, while the experts tried to defuse the bomb.
The old British TV series "UXB" was about a squad that went out to defuse any unexploded bombs leftover from the war.
Defuse may be used figuratively--
He made a feeble attempt to defuse the situation, but the crowd was still angry.

Diffuse or diffuse means scattered or sparsely spread about--
The diffuse coating of road salt did very little to melt the ice.
Diffuse may also be a verb ( action word ), meaning to spread about or scatter widely--
The scientists watched to see if the particles would dissolve or diffuse in the solution.

Now that you know that, you can say--
"The crowd dispersed somewhat and had become diffuse by the time the police arrived to defuse the situation."