A number of people were injured when a car collided with security barriers outside the Houses of Parliament on Tuesday morning and the driver was arrested, police said.
Police subsequently confirmed that the incident was being treated as a terrorist attack.
'At this stage, we are treating this as a terrorist incident and the Met's Counter Terrorism Command is now leading the investigation,' said Scotland Yard.
Two people have been taken to hospital with injuries not thought to be life-threatening.
Footage on social media showed a handcuffed man being led away by heavily armed police.
Westminster Underground station, close to parliament, was closed and the building was cordoned off. No one was being allowed entry to parliament. As parliament is in recess for summer, most lawmakers are not using the building.
The crash occurred at 0637 GMT.
London mayor Sadiq Khan said on Twitter: 'All Londoners, like me, utterly condemn all acts of terrorism on our city.
The response of Londoners today shows that we will never be cowed, intimidated or divided by any terrorist attack.
'My heartfelt thanks goes to the brave first responders who were so quickly on the scene following the attack.'
Home Secretary Sajid Javid said: 'Huge thanks to our emergency services for their rapid reaction to incident in Westminster this morning. My thoughts are with those injured.'
Among the buildings closed by the police cordon is Methodist Central Hall, Westminster, whose deputy superintendent minister Rev Tony Miles said: 'Thank you to all who've asked how we are in Westminster following today's security alert. Our building is still closed due to the police cordon. We praise the police for their swift & efficient response. Please pray for two who were injured & those investigating the incident.'
In March 2017, Khalid Masood, 52, killed four people on nearby Westminster Bridge before he stabbed to death an unarmed police officer in the grounds of parliament. He was shot dead at the scene. It was the first of five attacks on Britain last year which police blamed on terrorism.
Additional reporting by Reuters.
