Two addresses in east London were searched by police early this morning, with the Metropolitan Police confirming that officers entered properties in Newham and Barking at 4.15am.
The force said 'a number' of people have been detained.
Residents reported hearing 'loud flash bangs and gunshots' in the early morning raids.
Twitter user BatemanLDN said: "It woke me up along with the whole street. Extremely loud bangs followed by gunshot bangs.
"All ok - very shaken residents nearby though. All quietened down now."
Simon Tucker wrote: "Heard this in the Dagenham area at around 4.15 am. Started with loud explosion sound. Followed by about 20 shots, Some sounded distant."
Terrorists brought carnage to the streets of Britain for the second time in as many weeks on Saturday, killing seven and leaving 21 fighting for their lives.
Pedestrians were mowed down by a van on London Bridge before attackers stabbed a police officer and revellers around Borough Market with 12-inch knives.
One of the attackers shouted 'this is for Allah' as he knifed a man near a pub - while the Islamic State militant group claimed its fighters carried out the attack.
The three men, wearing fake suicide bomb vests, were shot dead by eight officers outside a pub after police opened fire with an''unprecedented' hail of 50 bullets, while a bystander was also shot.
Officers say they know the identities of the men who carried out the attack and will release the names 'as soon as operationally possible'.
Scotland Yard said seven women and five men aged between 19 and 60 were arrested under the Terrorism Act in Barking on Sunday. A 55-year-old man was later released without charge.
The first victim of the attack has been named as Canadian national Christine Archibald, who moved to London to be closer to her fiance.
Her family said in a statement: "We grieve the loss of our beautiful, loving daughter and sister. She had room in her heart for everyone and believed strongly that every person was to be valued and respected.
"She would have had no understanding of the callous cruelty that caused her death."