British counter-terrorism officials investigate armed man arrested near queen's palace

A man armed with a large knife who assaulted two police officers outside Buckingham Palace is being investigated by counter-terrorism officials, British police said on Saturday.

The man was stopped on Friday evening while driving in a restricted area near the palace, the London home of Queen Elizabeth, after officers spotted a blade weapon in his car.

"During the course of detaining him, two male police officers suffered minor injuries to their arm," police said. They were later discharged after treatment.

The suspect, who is in his mid-20s according to the police, was arrested on suspicion of grievous bodily harm and assault on police. He was then further arrested under Britain's Terrorism Act, the police said in another statement overnight.

Britain has been hit this year by four militant attacks in which 36 people were killed, and the country's threat level is at severe, meaning an attack is highly likely.

No members of the royal family were present in the palace at the time. The area is a magnet for tourists in Britain's capital in the peak August holiday weekend.

"My partner saw a sword (...) as well as a policeman with blood on him, looking like his hand or chest was injured. The police officer had it in his hand, walking away with it," said an unnamed witness quoted by The Times newspaper, who said tourists were running away from the scene.

"Something happened before, which is why the people ran away. I'm not sure what this was. But people were already scared and I saw the policeman pull the man from the car" the witness said.

The suspect was taken to a London hospital for treatment of minor injuries, and there were no other reported injuries.

Police appealed to witnesses to come forward with any further information on the incdient.