ANTI-terror cops and MI5 are now probing the Poppy Day taxi explosion after three men were arrested tonight in armed swoops.
Gun-toting officers descended on two residential streets hours after the fatal blast at Liverpool Women's Hospital just before 11am.
Pals named the wounded cabbie as Dave Perry and hailed him a hero after he noticed the passenger acting suspiciously and locked him inside.
The horror has not been declared a terror attack - but it understood police are investigating whether the timing was deliberate as the nation fell silent for Remembrance Day services across the country.
Tonight police said three suspects - aged 29, 26 & 21 - had been held under the Terrorism Act in the Kensington area of the city, where a large police presence was seen in Boaler Street.
Witnesses claim the trio were arrested just after 4pm.
Meanwhile, reports claimed police negotiators were locked in a stand-off with suspects after gun cops surrounded homes on Rutland Avenue, two miles south in Sefton.
The street was reportedly evacuated on Sunday evening amid the ongoing incident.
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Earlier, horrified witnesses reported hearing a "loud bang" and seeing "dark smoke" as the car went up in flames outside the hospital on Crown Street.
Dramatic pictures showed a car on fire in the car park just inches from the main entrance to the hospital, where 30 babies are born each day.
Another showed the burnt wreck after the fireball was extinguished.
Brave cabbie Dave Perry leapt from the car and locked the doors as the device exploded.
His "quick-thinking" was praised by pals who said he was currently stable in hospital with burns and shrapnel injuries, including damage to his ear.
Billy Darwin was among those paying homage to the taxi driver, posting online: "DAVID PERRY The Liverpool HERO!!!!"
"David nearly paid the ultimate price to save others, apparently not giving anything a second thought besides making sure he went above and beyond to keep the people of Our City safe!"
Staff had to evacuate some patients and transfer them to other hospitals as the Army bomb squad sealed off the area.
Police said the taxi had pulled up in the car park and exploded at 10.59am.
The Women’s Hospital is just a mile from Liverpool Cathedral, where military personnel, veterans and civic dignitaries had gathered for a Remembrance Day service.
The North West Counter Terrorism Unit, leading the probe along with Merseyside cops, said: "The passenger of the vehicle - a man - was declared dead at the scene and is yet to be formally identified.
"The driver - also a man - was injured at the scene and remains in hospital in a stable condition.
"We are keeping an open mind as to what has caused the explosion.
"We are working at a rapid pace to try and establish the circumstances behind this and will update in due course."
Home Secretary Priti Patel said she is "being kept regularly updated" on the terror probe.
Prime Minister Boris Johnson said: "My thoughts are with all those affected by the awful incident in Liverpool today.
"I want to thank the emergency services for their quick response and professionalism, and the police for their ongoing work on the investigation."
Liverpool Mayor Joanne Anderson labelled the incident as "unsettling and upsetting", but praised the emergency services for their swift response.
The arrests come after armed police swooped on homes in the city - in Rutland Avenue, near Sefton Park, and Boaler Street.
THREE ARRESTED
Officers confirmed the activity focussing on a semi-detached property in Rutland Avenue, that appeared unoccupied, was linked to the hospital explosion.
One resident on the street in Kensington told Mail Online: "They grabbed two men and handcuffed them behind their backs."
Another added: "They were bundled into the van. They had grabbed them from one of the houses. I had never seen them before."
Both streets remain cordoned off amid the ongoing investigations.
Some reports suggest addresses are being searched while residents have complained they are unable to leave their homes.
One local, who described the situation as "alarming", said she was ordered back inside by officers.
Counter-terrorism officers are investigating "out of caution" but police say the explosion has not been declared a terrorist incident.
It is unclear whether the probe is focused on the fact the blast happened at the same time as Remembrance services were taking place across the country.
So far we understand that the car involved was a taxi which pulled up at the hospital shortly before the explosion occurred.
Merseyside Police
But security expert Will Geddes, of International Corporate Protection, suggested IS could be behind the blast because of:
- TARGET — IS has targeted a number of hospitals and medical facilities in Afghanistan recently.
- TIMING — around 11am on Remembrance Sunday as the nation honoured its war dead.
- CAUSE — Mr Geddes suspects it was a VBIED (vehicle-borne improvised explosive device) also associated with the fanatics.
Security sources last night said “all options are on the table”, as a major investigation was under way.
Spooks were urgently trying to find out the identity of the dead passenger to establish if he had appeared on any intelligence-led lists of terror suspects.
Sources said that the next 24 hours would be critical, with experienced anti-terror detectives from Scotland Yard also being asked to lend their expertise.
A Royal Logistic Corps army vehicle was seen at the scene today as the tragedy unfolded.
Merseyside Police said in a statement: "Unfortunately, we can confirm that one person has died and another has been taken to hospital where he is being treated for his injuries, which thankfully are not life-threatening.
"So far we understand that the car involved was a taxi which pulled up at the hospital shortly before the explosion occurred.
"Work is still going on to establish what has happened, and could take some time before we are in a position to confirm anything.
"We are keeping an open mind as to what caused the explosion but given how it has happened, out of caution, Counter Terrorism Police are leading the investigation supported by Merseyside Police.
HOSPITAL HORROR
"The emergency services have well-rehearsed plans for dealing with major incidents. Our response is ongoing at the hospital and will be for some time. Cordons are in place, and there are some road closures.
"This has not been declared a terrorist incident at this stage although out of caution CT detectives are leading as we try to understand the circumstances behind the explosion."
Phil Garrigan, chief fire officer of Merseyside Fire and Rescue Service, said the car fire at Liverpool Women's Hospital was "fully developed" when two appliances arrived.
He said: "The operational crews extinguished the fire rapidly but as has been reiterated by the police chief constable, there was one fatality.
"Another individual had left the vehicle prior to the fire developing to the extent that it did. Our thoughts are with them and the families of those involved."
Liverpool Women’s Hospital announced visiting access is restricted "until further notice" and patients will be sent to other medical facilities "where possible".
A spokesperson said staff will be reviewing "patient activity for the next 24 to 48 hours" and assured support is available for anyone impacted by the incident.
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Liverpool Women’s Hospital featured on hit Channel 4 series One Born Every Minute and sees 500,000 patients a year.
The hospital — where Coleen Rooney gave birth to her four sons — has around 1,350 staff who work there.