Witnesses have described seeing a man 'beheaded' in the street today (Wednesday) in Woolwich, south east London.
The Met Police have confirmed a man was killed and two others were taken to hospital with gunshot wounds following the "serious incident",understood to involve a serving soldier.
Several witnesses described seeing a "beheading" while another described seeing a man wearing a Help for Heroes T-shirt being attacked with a machete-style knife and dumped in a south east London street.
Officers were called to John Wilson Street in Woolwich at around 2.20pm today and the immediate area was shut down.
MP Nick Raynsford tells the BBC that one person is dead and two seriously injured. Reports suggest a man was attacked in the street by two individuals, followed by a police shooting.
Local head teacher David Dixon told the BBC News Channel he walked out of the school gates and saw a body lying in the road a short distance away, he then heard gunshots.
One witness, identified as James, said he and his partner saw two black men attack the young victim with knives, including a meat cleaver.
"They were hacking at this poor guy, literally," he told LBC.
"They were hacking at him, chopping him, cutting him."
Fighting back tears, James said the men treated their victim as a "piece of meat" after he was dead.
"These two guys were crazed," he told the radio station.
"They were just animals.
"They dragged him from the pavement and dumped his body in the middle of the road and left his body there."
He said that after the "horrendous" attack, the two men, in their 20s, just stood around, waving knives and a gun, even asking people nearby to take pictures of them "as if they wanted to be on TV or something".
"They were oblivious to anything, they were more worried about having their photo taken, running up and down the road," he said.
"They had no intention of running off or leaving or anything.
"In my opinion, they were waiting for the police to arrive to be shot by the police. That's the only thing I can think.
"It's horrendous what they were doing to that guy."
Some "brave" women tried to shield the man on the ground from them, he added.
He also said that it was 20 minutes before armed police arrived at the scene.
"When the armed police came flying around the corner, the man with the beanie hat, the tall guy, he charged at the police vehicle," he said.
"A shot was fired by the other guy with the gun.
"Six shots were fired, both men went down and we now know they are dead as well."
A Scotland Yard spokesman said: "Officers have responded to an incident in John Wilson Street at 2.20pm today.
"We believe at this stage officers were called to reports of an assault."
London Air Ambulance confirmed a doctor and a paramedic were sent to the scene at 14.27pm and are on site.
Eyewitness reports shared on Twitter have not yet been verified, but one user Boya Dee described the victim having his head chopped off with a machete before officers descended on the scene.
He wrote: "Ohhhhh myyyy God!!!! I just see a man with his head chopped off right in front of my eyes!
"Oh my God!!!! The way Feds took them out!!! It was a female police officer she come out the whip and just started bussssin shots!!"
London Ambulance Service was also called to the scene.
A spokeswoman for London Ambulance Service said: "We were called a 2.20pm to reports of an incident at John Wilson Street.
"We sent two responders in cars, three ambulance crews, two duty officers and London Air Ambulance were called out.
"We still have staff at the scene."
Cheryl Spruce, who lives near the incident, told Sky News that a nearby school was put into "lockdown".
She said: "The police were telling us to take an alternative route to get to school.
"There were police everywhere. There were 30 to 40 police officers.
"Police officers in each road were stopping people from walking anywhere. It's mayhem out there at the moment."
Woolwich and Greenwich MP Nick Raynsford said it was his understanding that one person, a serving soldier, was dead and the two alleged suspects were in a serious condition in hospital.
He said he had spoken to both borough commander Richard Wood and Lieutenant Colonel Bob Christopher at Woolwich Barracks.
Mr Raynsford said: "The incident occurred early afternoon. One individual is dead, two others are seriously injured and in hospital.
"The circumstances causing the incident are not yet clear. It's been suggested it was the product of a road traffic accident, but that's pure speculation.
"I'll be talking to everyone who is involved, we will be trying to do everything possible to try and ensure calm in the area. People will be very, very shocked.
"We think a serving soldier was the victim. We don't know the circumstances surrounding the incident.
"We do know a number of weapons have been seized. They include a gun, various knives, and a machete, apparently.
"The police clearly had to take action in order to try and arrest these individuals."
The Independent Police Complaints Commission, which is called in when ever firearms officers shot people, said it investigating.
A spokesman said: "The Independent Police Complaints Commission (IPCC) has been made aware by the Metropolitan Police Service of incident in Woolwich, south London.
"IPCC investigators have been deployed to the scene and to the post-incident process.
"The IPCC has declared this as an independent investigation."
David Dixon, headteacher of the nearby Mulgrave Primary School and Early Years Centre, said he had seen a body lying in the road.
"All the traffic had stopped. There were gunshots after that so I am not sure about the situation after," he told BBC News.
"But all I needed to know was that there was an emergency and we needed to go into our emergency procedures to make sure that the children were as safe as possible.
"That was my main priority.
"We got all the staff to get the children in because some of them were outside doing activities, we locked all the gates.
"I and some of my senior staff liaised with police to find out what we needed to do after that."
He said the air ambulance had landed in the playground of the school.