LIVERPOOL (NYTIMES, REUTERS) - British police on Monday (Nov 15) declared a blast in a taxi outside a Liverpool hospital a terrorist act and arrested a fourth person after determining that it had been caused by an "improvised explosive device".

At the same time, local leaders praised the taxi driver as a hero, saying that he had prevented an even bigger calamity.

The mayor of Liverpool, in north-western England, said that the driver had quickly escaped the burning vehicle and locked the doors, trapping the passenger who was carrying the explosives inside the taxi.

Prime Minister Boris Johnson praised the taxi driver, whom British media have identified as Mr David Perry.

"It does look as though the taxi driver in question did behave with incredible presence of mind and bravery," he said.

The passenger - identified by the UK police as 32-year-old Emad Al Swealmeen - was the only person killed in the blast Sunday.

"It is not clear what the motivation for this incident is," Mr Russ Jackson, the head of counterterrorism policing for north-western England, said at a news conference Monday, adding that, nonetheless, the blast was being treated as a terrorist act.

"Our inquiries indicate that an improvised explosive device had been manufactured, and our assumption so far is that it was built by the passenger in the taxi."

While attacks of this kind are rare in Britain, the country has been hit by high-profile suicide attacks in recent years.

In 2005, there was a series of suicide attacks across London that killed 52 people, and in 2017, an attack on the Manchester Arena, carried out by an Islamist extremist who had met with members of the Islamic State of Iraq and Syria (ISIS) group, killed 22.

According to the BBC, MI5, a British intelligence service, is involved in the Liverpool investigation.

Police searched two places associated with Al Swealmeen, one in Rutland Avenue and another in Sutcliffe Street.

At about 1pm, officers wearing vests labelled 'negotiator' were seen at Rutland Avenue where police said they recovered significant items .

At about 2pm, witnesses reported seeing armed officers approach a terraced house on Sutcliffe Street. Three men, aged 21, 26 and 29, were arrested. Their names were not immediately released.

A fourth man, 20, was arrested Monday. Under the Terrorism Act in Britain, the men can be held for up to 14 days without being charged.

While the authorities cautioned that there was no specific ongoing threat, Britain's national terrorism threat level was raised from "substantial" to "severe," Prime Minister Boris Johnson said during an afternoon news briefing, indicating that another attack was "highly likely."

Mr Jackson described how the blast had unfolded shortly before 11am, when Mr Perry, picked up a man who asked to be taken to the Liverpool Women's Hospital.

As the taxi approached the drop-off point at the hospital, an explosion went off inside the vehicle and engulfed it in flames. Remarkably, the driver escaped with minor injuries.

An initial investigation determined that the passenger had taken an explosive device into the cab.

Security camera footage taken at the scene shows the moment the taxi pulled up at the hospital entrance, before a blast appears to blow the windows out of the vehicle.

White smoke can be seen rising from the car as the driver leaps out of the front seat. Within seconds, the entire vehicle can be seen engulfed in flames.

Mr Johnson called the explosion a "sickening attack" and said that he had held a meeting of the government's top emergency committee earlier in the day.

While the investigation "continues at pace," Mr Johnson said, he noted that the blast was "a stark reminder of the need for us all to remain utterly vigilant."

"We will never be cowed by terrorism, we will never give in to those who seek to divide us by senseless acts," Mr Johnson added.

The investigation will now "seek to understand how the device was built, the motivation for the incident and to understand if anyone else was involved in it," Mr Jackson said, adding that this "is a reminder that the threat from terrorism remains significant."

A mile away from the blast site, thousands of veterans, military staff and local leaders were holding a Remembrance Day ceremony in Liverpool Cathedral at the time of the explosion.

It is still unclear whether the incident was linked to the event, a commemoration of Britain's war dead.

"We cannot at this time draw any connection to this," Mr Jackson said. "But it is a line of inquiry that we are pursuing."

Ms Serena Kennedy, chief constable of Merseyside Police, the force that is responsible for Liverpool, said there would be more officers on the streets in the coming days.

"There is no specific threat to the area, but I have asked for patrols to be increased across Merseyside," she said in a statement Monday.