A motorist slammed into pedestrians and cyclists near Britain's Houses of Parliament on Tuesday and police are treating the incident as an act of terror.

A man in his 20s was arrested on suspicion of terrorist offenses after the silver Ford Fiesta collided with rush-hour commuters before slamming into a barrier. Two people were hurt, but authorities said none of the injuries are life-threatening.

Witnesses heard a "loud bang" as the silver vehicle hit barriers in Westminster at around 7.30am (UK time).

United Kingdom correspondent Gavin Grey told the Herald the area around the crash is in lockdown as the scene is investigated.

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"Lockdown in London in that part as you can imagine, large areas are sealed off.

"They just want to make sure the area is completely clean before it's reopened and I think that could be several hours away," Grey said.

Around a dozen armed officers swamped the vehicle and trained their rifles on a man in a black puffer jacket who was pulled from the car and taken away, the Daily Mail reported.

Ewelina Ochab told AP that the crash appeared deliberate.

"The car drove at speed into the barriers outside the House of Lords. There was a loud bang from the collision and a bit of smoke," she said.

"The driver did not get out. The guards started screaming to people to move away."

Grey said for other parts of London it was business as usual but after last year's terrorist attack, some locals are bound to be on edge.

"Plenty of action there at the moment, a lot of police, a lot of armed police, lots of ambulances and fire officers as well in attendance.

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"It is bound to raise peoples fears and peoples concerns but the message from police is carry on as normal," Grey said.

Mail Online reported injured cyclists were sprawled in the road next to their mangled bikes.

Video footage showed paramedics attending to the cyclists next to Parliament Square in Westminster following the smash that saw the area put into lockdown.

Worried bystanders could be seen looking on as the cyclists sat on St Margaret Street waiting for help following the crash that has injured at least two people.

One cyclist, a management consultant, told MailOnline how he cheated death as the speeding car ploughed past him - knocking down the cyclist next to him.

Geoffrey Woodman, 27, from Battersea, was cycling to work when he heard a "loud screech" and the car slammed into the woman on the bicycle next to him.

"I felt very shocked," he said. "It was a very odd experience to have. It happens more and more but you never expect it to be you. It was so close.

"One slight turn of the wheel and it would have taken me out. I had pulled up to the red light by Parliament Square and put my foot down.

"After about ten seconds I heard a car screeching over the bridge. It was obscured behind a van at first but then it cut out in front of us through the red light on the wrong side of the road.

"It swerved left and hit the lady two bikes to my left. It was going about 40 to 50mph. Its windscreen hit her quite hard as she was trying to jump off to the left.

"I'm jumping off to the right and once it had gone past I looked to the left and saw her on the ground with bikes everywhere. It was chaos.

":She was a middle-aged lady, about 40 to 45 years old, about 5ft 5in tall. She was wearing cycling gear, grey trousers, a bright top and a helmet.

"She was on the ground talking to about ten other cyclists who were clustered around her. She was in a lot of distress.

"There was no blood but I'd be surprised if there were no broken bones. I think she may have broken her hip."

Cyclists are sprawled across the road after the car ploughed into them. Photo / via Twitter
Cyclists are sprawled across the road after the car ploughed into them. Photo / via Twitter

Scotland Yard said this morning they were currently treating the incident as a serious road traffic collision and arrested a suspect at the scene.

But a large cordon was set up around Parliament this morning and up to 200 officers have been sent to Westminster who moved members of the public away from the scene.

The Houses of Parliament was also on lockdown and entrances were closed after the incident.

The crash came 17 months after Khalid Masood drove into pedestrians on Westminster Bridge before stabbing to death PC Keith Palmer at the gates of Parliament.

Witnesses said officers initially stood back and said it seemed as if they were concerned that the car may have contained a bomb.

A man is taken into custody by UK police. Photo / via UKTV
A man is taken into custody by UK police. Photo / via UKTV

Witness Jason Williams told ITV's Good Morning Britain that the incident was "very, very scary", adding that he was feeling 'very anxious'.

He said: "Basically I've seen a man driving a vehicle, and he's gone into one of the bollards. There was a loud bang.

"Straight away I thought 'Oh no, this is another terrorist attack'. So I've just started to run and the police were saying 'get out, get out of the area'.

"It (the car) was behind me. I didn't see anyone else involved. I just saw this one vehicle, so it seems to be deliberate.

"I was very surprised (the police didn't go in straight away). They seemed to be standing back. They were obviously a bit wary, like what's going to happen next?

"I don't know if it was a tip-off, a warning, that this was a bomb. There seems to be maybe about 200 police here now, and it's all happened very quickly in the space of half an hour."

Police have cordoned off Millbank and Victoria Tower Gardens.

Armed police, ambulances and firefighters were all on the scene.

Scotland Yard said on Twitter: "At 0737hrs today, a car was in collision with barriers outside the Houses of Parliament.

"The male driver of the car was detained by officers at the scene. A number of pedestrians have been injured. Officers remain at the scene.

"We will issue further info when we have it."