A major police operation was launched today after two terrorists murdered a soldier in the street in broad daylight.

Eyewitnesses said the victim was hacked to death, with some suggesting his attackers tried to behead him, before charging at police when they arrived on the scene in Woolwich, south east London.

One of the suspects behind the attack in Woolwich, south east London, was filmed wielding a bloodied meat cleaver and saying, "We swear by almighty Allah we will never stop fighting you", in footage shown on ITV News tonight.

The black man, dressed in a grey hooded jacket and black woolly hat, apologises to members of the public who witnessed the horrific scenes before making a number of political statements.

In the footage, he is heard to say: "We must fight them as they fight us. An eye for an eye, a tooth for a tooth.

"I apologise that women have had to witness this today, but in our land our women have to see the same. You people will never be safe. Remove your government, they don't care about you."

The suspected attacker, who spoke clear English without a foreign accent, is then seen walking towards his victim, lying in the street in Woolwich, south east London. Another man is stood over the body.

Prime Minister David Cameron called a meeting of the Government's Cobra crisis committee, describing the incident as "truly shocking".

Metropolitan Police Commander Simon Letchford confirmed that the victim's two attackers were shot by armed officers.

He said in a statement: "At approximately 1420 we were called to reports of an assault in John Wilson Street, Woolwich, where one man was being assaulted by two other men.

"A number of weapons were reportedly being used in the attack, and this included reports of a firearm.

"Officers including local Greenwich officers arrived at the scene and shortly after firearms officers arrived on the scene.

"On their arrival at the scene they found a man, who was later pronounced dead. At this early stage I am unable to provide any further information about the man who has died.

"Two men, who we believe from early reports to have been carrying weapons, were shot by police. They were taken to separate London hospitals. They are receiving treatment for their injuries."

Police later confirmed they were under arrest.

He added: "I can understand that this incident will cause community concerns and I would like to reiterate that we are investigating what has taken place today.

"The MPS will investigate the circumstances that led to a man losing his life and the IPCC, as is routine, will investigate the circumstances in which police discharged their weapons.

"There will continue to be an increased police presence in this area, and the surrounding areas this evening. That presence will continue as long as is needed.

"I am asking people to remain calm, and avoid unnecessary speculation. I will update you again as soon as I am in a position to do so."

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.

Woolwich and Greenwich MP Nick Raynsford said it was his understanding that one person, a serving soldier, was dead and his two alleged killers were taken to hospital after armed police shot them.

London Ambulance Service confirmed a man was found dead at the scene, while two other men were taken to hospital, one of them in a serious condition.

One witness, identified as James, said he and his partner saw two black men attack a young man aged around 20 in a Help for Heroes T-shirt with kitchen knives like he was "a piece of meat".

"They were hacking at this poor guy, literally," he told LBC radio.

"They were hacking at him, chopping him, cutting him."

Fighting back tears, he added: "These two guys were crazed.

"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."

London Air Ambulance confirmed that one patient was airlifted from the scene, while another was taken away by road ambulance.

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."

John Wilson Street was shut in both directions between Artillery Place and New Ferry Approach.

Pictures showing three men lying on the ground appeared on Twitter shortly after the incident.

The images also appeared to show knives and bloodstains at the junction of John Wilson Street and Wellington Street.

Witnesses described the incident on Twitter as ''horrific''.

One user, using the account @Boyadee, wrote of seeing two men decapitate another man in front of him as he went to a nearby shop.

He suggested that the men looked like they were on drugs, waiting for the police to arrive and then going towards them with "just two machete and an old rusty lookin revolver".

"I couldn't believe my eyes. That was some movie sh*t," he wrote.

The Ministry of Defence said it was urgently looking at the reports that the incident involved a soldier but had no further comment.

The incident occurred some 200 yards from the Royal Artillery Barracks, adjacent to Woolwich Common, the historical home of the Royal Artillery.

The barracks, also known as the Woolwich station, now houses a number of the King's Troop Royal Horse Artillery and independent companies of the Grenadier and Coldstream Guards.

Woolwich Common remains a designated military training area.

The shooting events at the 2012 Summer Olympics and Paralympics were held at a temporary venue at the Barracks.

Julia Wilders, 51, who lives near the scene, said she had seen one of the attackers run towards police clutching two meat cleavers.

She said: "He ran towards police before they could even get out of the car, and it looked like the other one was going to lift the gun up."

She had been driving home with her husband and they saw the man who was attacked lying on the ground.

"We were driving back and my husband said to me 'don't look, they're resuscitating someone'. But apparently they were stabbing him.

"We went back down there and saw a black man with a gun. My husband phoned the police and I went to the school to tell them.

"About 20 minutes later I went back there and another man had the gun and the taller man had two meat cleavers."

The taller man was wearing a black woolly hat and the shorter one a green top, she said.

Eyewitness Graham Wilders described two men surrounding another.

He told the BBC: "I saw two people lying over him and I thought they were trying to resuscitate him. I went down to the garage and another bloke come along and told me they were actually stabbing him.

"Apparently they actually ran the car into him and knocked him down before they did anything.

"And the next minute a silver car came along and a man got out and shouted he was going to phone the police.

"The next thing that happened was he actually pulled a handgun out. It was a gun that looked as if it could take about 12, 15 rounds so I definitely know it was handgun because I actually seen it in his hand."

He added the silver car then "shot off" and he shouted to warn children coming out of school with their teachers to get back inside the building.

"I was more concerned about the kids because he had a handgun and he'd pull it out. As soon as he pulled that out I panicked, you know what I mean," he told the BBC.

"The police were down at the bottom of the road where I live. They were round the corner and they said they actually couldn't do anything until Trojan turned up.

"I would have waited for someone with a gun because this man had a handgun. He didn't fire the gun. All I heard was four shots when the Trojan people turned up. These men actually went for the police with the machetes, knife and handgun.

"I don't think they cared. I don't think they really cared because they went for the police with a handgun. The police were the only ones who did any shooting.

Mother of two Ingrid Loyau-Kennett, 48, from Cornwall, confronted one of the attackers warning them: “It is only you versus many people, you are going to lose”

She said: “I asked him if he did it and he said yes, and I said: ‘Why?’ And he said because he has killed Muslim people in Muslim countries, he said he was a British solider and I said, really? And he said: ‘I killed him because he killed Muslims and I am fed up with people killing Muslims in Afghanistan, they have nothing to do there.”’

The Metropolitan Police Commissioner Sir Bernard Hogan-Howe said that officers from the counter terrorist unit were leading the investigation into the “shocking and horrific” Woolwich murder, adding that two people have now been arrested.

Meanwhile, police contained a group of English Defence League supporters who waved a flag of St George and chanted “no surrender to the Muslim scum” in Woolwich.

There were two arrests following an attack on a mosque in Braintree, Essex, and another in Gillingham, Kent.