Two men wielding knives and a gun murdered a man believed to be a British soldier near a London barracks, before delivering an Islamist tirade to passers-by.
Prime Minister David Cameron, condemning the "appalling" attack, added: "There are strong indications that it is a terrorist incident."
Eyewitnesses described how two men attacked a man in the street in broad daylight with knives and a gun. They then stayed at the scene, asking passers-by to photograph and film them.
Armed police shot and wounded the two attackers after bystanders had called them to the scene.
Amateur footage of one of the men carrying a blood-stained knife and meat cleaver shows him saying: "We swear by almighty Allah we will never stop fighting you."
The man, a black man dressed in a hooded jacket and black woolly hat, speaks in a London accent.
"We must fight them as they fight us. An eye for an eye, a tooth for a tooth," he says.
"I apologise that women have had to witness this today, but in our land our womenRead More »from 'British soldier' butchered in suspected Islamist attack