Britain's national security chiefs met on Thursday as counter-terrorism police investigated the murder of a soldier who was hacked to death in a London street by two suspected Islamic extremists.
The suspects were shot by police after the "appalling" attack and spent the night in hospital under armed guard.
Wielding knives including a meat cleaver, two men carried out the attack in broad daylight near the Royal Artillery Barracks in Woolwich, southeast London, then delivered an Islamist tirade to passers-by.
The victim has yet to be formally identified, but government sources confirmed that he was a member of the armed forces.
Prime Minister David Cameron condemned the "appalling crime", adding: "There are strong indications that it is a terrorist incident."
He cut short a visit to Paris to fly back for a meeting of the government's emergency response committee, COBRA, which had already met in the hours following the attack.
The head of MI5, the domestic intelligence agency, was expected to attend Thursday's meeting along with the head of Scotland Yard, interior minister Theresa May and London mayor Boris Johnson.
Chilling amateur footage of one of the suspects shows him with bloody hands and still holding a blood-stained knife and meat-cleaver, telling a member of the public: "You people will never be safe."
"We swear by almighty Allah we will never stop fighting you," adds the man, who is black and speaks in a London accent.
He went on to make various political statements in the video, including a demand for Cameron to "bring our troops back".
Eyewitnesses described how after the killing, at around 2:30 p.m. on Wednesday, the men stayed at the scene asking passers-by to photograph and film them.
"I apologise that women have had to witness this today, but in our lands our women have to see the same," said the suspect, who was wearing a hooded jacket and a black woolly hat.
"We must fight them as they fight us. An eye for an eye, a tooth for a tooth."
Media reports citing witnesses said the men first ran over their victim in a car before finishing him off with the knives.
Several eyewitnesses said he had been decapitated.
Rapper Boya Dee, who witnessed the incident, wrote on his Twitter account: "Ohhhhh myyyy God!!!! I just see a man with his head chopped off right in front of my eyes!"
Reports said the victim was wearing a t-shirt bearing the logo of the British military charity Help for Heroes.
Meanwhile a female scout leader has shot to fame after she confronted the assailants shortly after the attack, telling them: "It is only you versus many people. You are going to lose."
Ingrid Loyau-Kennett, 48, told the Daily Telegraph that when she asked one of the suspects why they had carried out the attack, he told her: "We want to start a war in London tonight."
She told the newspaper: "He was not high, he was not on drugs, he was not an alcoholic or drunk, he was just distressed, upset.
"He was in full control of his decisions and ready to everything he wanted to do."
Late Wednesday around 250 members of the anti-Islamist English Defence League were involved in minor scuffles with police at Woolwich Arsenal train station, near the scene of the attack.
Two men were arrested overnight after separate attacks on mosques.
One was detained in Braintree in Essex, southeast England, after reportedly walking into a mosque with a knife.
Police said another man was arrested in nearby Gillingham, Kent, on suspicion of racially aggravated criminal damage to a mosque.
Security has been strengthened at all army barracks in London.
Cameron, speaking to journalists before flying back from Paris, called the attack "truly shocking".
Speaking at a joint news conference with French President Francois Hollande, he added: "We've had this sort of attack before in our country and we never buckle in the face of them.
The Muslim Council of Britain described the attack as "a truly barbaric act that has no basis in Islam".
"We condemn this unreservedly. Our thoughts are with the victim and his family," the organisation said in a statement.
London's mayor Boris Johnson said it would be "completely wrong to blame this killing on the religion of Islam".
"But it is also equally wrong to try to draw any link between this murder and British foreign policy or the actions of British forces who are risking their lives abroad for the sake of freedom," he told Sky News.
"The fault lies wholly and exclusively in the warped and deluded mindset of the people who did it."
The United States condemned the attack.
"We stand with our UK allies in the face of such senseless violence," State Department spokesman Patrick Ventrell said in a statement.
AFP