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London Police say the man who attempted a sword attack outside Buckingham Palace repeatedly shouted "Allahu Akbar" before he was taken down by officers with pepper spray.
The Metropolitan Police confirmed that Friday's events outside the palace of the British monarchy is being treated as a terrorist incident.
The altercation unfolded just after 8:30pm when a man driving a blue Toyota Prius was confronted by officers in a restricted area on Constitution Hill.
The driver of the vehicle is alleged to have reached for a four-foot sword before he managed to be immobilized by police using CS spray. Three Metropolitan police officers received minor injuries during the incident.
A 26-year-old man from the Luton area has been arrested on suspicion of grievous bodily harm, and is being held on terrorist charges, according to a Met Police statement.
"Officers from the Counter Terrorism Command are now investigating and searches are being carried out in the Luton area today [Saturday]," said Commander Dean Haydon, of the Met's Counter Terrorism Command.
"We believe the man was acting alone and we are not looking for other suspects at this stage. While we cannot speculate on what the man was intending to do - this will be determined during the course of the investigation - it is only right that we investigate this a terrorist incident at this time."
The terrorist threat in the UK remains high, following three major attacks in London and Manchester recently.
In June, eight people were killed and scores more injured when a van was deliberately driven into pedestrians on London Bridge. The three perpetrators fled into Borough Market, Southwark to carry out a stabbing spree where they were later shot dead by armed police.
Yet people drive on through it.
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