Three people were arrested under the Terrorism Act after a man was killed in a car explosion outside Liverpool Women’s Hospital.
A taxi carrying one passenger pulled up just before 11:00GMT and exploded.
The passenger was declared dead at the scene and is yet to be formally identified.
The male driver was injured and is in hospital in a stable condition.
Detectives from Counter Terrorism Police North West said three men aged 29, 26 and 21 were detained in the Kensington area of the city.
They said they were continuing to keep an open mind about the cause of the blast and were working with Merseyside Police as the investigation continued “at pace”.
Armed officers have carried out raids on properties in Rutland Avenue near Sefton Park, and Boaler Street in Kensington.
Prime Minister Boris Johnson said on Twitter: “My thoughts are with all those affected by the awful incident in Liverpool today.
“I want to thank the emergency services for their quick response and professionalism, and the police for their ongoing work on the investigation.”
Home Secretary Priti Patel also tweeted she was “being kept regularly updated on the awful incident”.