Scotland Yard said counterterrorism officers arrested a man and a woman - both 29 - on suspicion of conspiracy to murder. Both suspects are in custody at a south London police station.
Two men with butcher knives hacked a British soldier to death in broad daylight near a military barracks in the Woolwich area on Wednesday. Witnesses said the man was walking on the sidewalk when the suspects rammed into him with a car. The two men then got out of the vehicle and started hacking the victim.
One of the suspects then turned to a witness who was recording the incident on a cellphone and went on a rant, shouting political statements and gesturing with bloodied hands.
"We will never stop fighting you until you leave us alone. We must fight them as they fight us, an eye for an eye and a tooth for tooth. We apologize that women had to witness this today, but in our lands, our women have to see the same. You people will never be safe," the suspect said.
One woman, 48-year-old Ingrid Loyau-Kennett, is being hailed a hero because she got off a bus to check on the victim. She checked for a pulse and realized he was dead. She then turned to the attackers and tried talking to them and keeping them from lashing out at the crowds that were gathering.
Police arrived a short time later and officers shot and wounded the unidentified attackers, ages 22 and 28. They remain hospitalized in stable condition with injuries that are not life-threatening.
The soldier's identity has not been released at his family's request.
Prime Minister David Cameron said there are strong indications the attack was an act of terrorism. British embassies around the world are on heightened alert.