Witnesses described hearing shots as police arrested several people in connection with the London Bridge terror attack.
Residents said armed officers swooped on flats in Barking, east London, where they believe one of the attackers may have lived.
At least four police vans were stationed behind a cordon outside the Elizabeth Fry flats in King's Road.
Veronica Oladapo, 45, who lives in a neighbouring block, left her building at around 7am to see police taking four men and a woman away.
She said: "When I came out they were already taking some of the casualties away.
"There were three of them ... the ambulance came and took them away.
"There were another two sitting down inside."
One of the men had a hood pulled over his head while another one used a jacket to hide his face, she said.
Damien Pettit, 31, said he thought one of the attackers was possibly a neighbour who lived on the ground floor of his apartment block.
He told the Press Association: "He's lived here for about three years. He's one of our neighbours. I've said hello in passing more than 50/60 occasions. He has two young kids, he was a very nice guy."
He said it would be "a bit of a shock" if his neighbour was confirmed as one of the attackers.
Mr Pettit said he had seen a photo which appeared to show "one of the attackers upside down on the floor wearing camouflage trousers, which he (the neighbour) was wearing two days ago".
He said he immediately thought of his neighbour but could not confirm if it was definitely the same man as the attacker in the picture was face down.
More than five hours after the first arrests, a woman in a burka was led into a police van parked outside the flats.
It then drove away with sirens blazing, followed by three other vans.
Scotland Yard said 12 people had been detained in Barking "in connection with last night's incidents" and that searches at a number of addresses in the area were continuing.