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.
Furqan Nabi, a witness to the early morning arrests, said he saw four men lying face down on the floor.
One looked over 50, and another man looked at least 60 years old and had a beard, the 35-year-old neighbour said.
A third man was in his late 20s or early 30s, he said. He could not see the fourth man properly.
Around 20 emergency services vehicles were present, he added.
A scaffolding truck parked inside the police cordon by the block of flats just before 2.30pm.
Workers began bringing equipment round to the right hand side of the apartment block where the flat belonging to those arrested is thought to be.
Mr Pettit said the man on the ground floor had lived in the block for around three years and was in his mid 20s.
He said he was a Muslim who was "very much involved in the area".
He said: "We knew him as a neighbour. He was someone that has always been a member of the community in terms of wanting to help out.
"He's always been very affable, very pleasant."
A neighbour in Barking said one of the attackers, a man believed to be of Pakistani origin, had recently asked him where he could hire a van.
Ken Chigbo told Sky News that the man quizzed him about the van he was using to move house and where he could get one for himself.
Mr Chigbo, who spoke with the attacker on Saturday, said: "We were having a general conversation because I am in the process of moving house at the moment.
"I had a big van up here and he came up to me and said, 'Oh, Ken, you are moving'. He was usually a really nice, friendly guy but this time it was on a different level of nice.
"It was quite strange and hard to put into words.
"He was asking me where I am moving to, and then he started asking about the van.
"He said to me, 'Oh, where did you get your van, Ken? How much is it, is it possible to get in automatic?' - all these specific questions about the van, which obviously now makes sense in my head.
"At the time I didn't think anything of it."
Images of the van used by the attackers appear to show it is a white Hertz hire van, which also has B&Q branding on it.
A spokesman for Hertz said: "Our thoughts are with those affected by the terrible incident in London last night.
"We are assisting the authorities and are unable to comment further at this stage due to the ongoing police investigation."
A spokesman for B&Q referred all inquiries to the police.
Salaudeen Jailabdeen, 40, who lives in a neighbouring block of flats, said he immediately thought of his neighbour when he first saw a photo appearing to show one of the attackers on the ground.
"He is definitely yes, he is the one", he said, when asked how certain he was that the man he had seen in the photos was his neighbour.
"I don't believe that he (has) done that... he's very friendly to everyone," he added.
He recalled an incident in a mosque a couple of months ago where the man disrupted an imam who was preaching.
He said the incident took place at the nearby Jabir mosque: "He interrupted the Imam, he asked a question, he disagreed with that.
"And then people said to him 'don't interrupt this time, come back later or after the preach ask the questions'.
"He didn't agree with that," he said, adding that the man was then escorted out the mosque.
He said he could not remember the subject matter which was being discussed.
"There was concern about that but after that I don't know what happened," he said.
He added that the man had two young children - a toddler and baby.