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Liverpool car blast declared a 'terrorist incident' by U.K. police

“Our enquiries will now continue to seek to understand how the device was built, the motivation for the incident and to understand if anyone else was involved in it,” police said.

LONDON — A homemade bomb exploded in a taxi outside a busy hospital in Liverpool, England, over the weekend and was declared a terrorist incident by police Monday.

Police say that a taxi passenger made the "improvised explosive device" in the back of a car and that it went off as the vehicle pulled up outside Liverpool Women’s Hospital on Sunday.

The explosion happened minutes before a Remembrance Sunday service was to start at the nearby Liverpool Cathedral.

The passenger, who police "strongly believe" was named Emad Al Swealmeen, 32, died in the explosion, according to a statement from Counter Terrorism Police North West, which is heading up the investigation.

The taxi driver, named as David Perry, was injured and released from the hospital.

Police said they believe Al Swealmeen was linked to several addresses in the Rutland area of Liverpool, the neighborhood where he hailed the taxi, and where officers have been searching two addresses since the explosion happened.

The incident comes one month after British lawmaker David Amess was stabbed to death in what prosecutors allege was a murder with a "terrorist connection."

Later Monday, British intelligence agency MI5 said it had increased the country’s terrorism "threat level" to "severe," which indicates "an attack is highly likely."

Priti Patel, the British Home Secretary, who handles policing, said the threat level had been raised because "what we saw yesterday is the second incident in a month."

Police and forensic officers work through the scene of a car explosion at Liverpool Women’s Hospital Monday morning.Christopher Furlong / Getty Images

In Liverpool, three men, aged 21, 26 and 29, were arrested under terrorism laws in connection with the incident Sunday. A fourth man, aged 20, was arrested Monday, police said.

They were later released after being interviewed by investigators.

"We are satisfied with the accounts they have provided," said Russ Jackson, a counterterrorism official with Greater Manchester Police, in a statement. "The investigation continues to move at a fast pace with investigative teams working throughout the night."

He added that authorities had made "significant" progress in learning what components were used to assemble the bomb and where they were obtained.

During a news conference earlier, Jackson said it was unclear why the device was taken to the hospital.

Perry, the taxi driver, has not been named by officials, but his identity was indirectly confirmed by Emily Spurrell, Merseyside Police and Crime Commissioner, who told Sky News that "his name has been put all over the media so he’s getting a lot of attention."

Earlier, Liverpool Mayor Joanne Anderson praised Perry as "heroic," saying he had locked the passenger in the car before the blast hit.

However, security camera footage showed the driver getting out of the car after the explosion happened. This was corroborated by an apparent Facebook post by Perry's wife.

"There are a lot of rumors flying around about him being a hero and locking the passenger inside the car," the post said, which has limited visibility settings and has only been seen by NBC News as screenshots. "But the truth of the matter is, he is without doubt, lucky to be alive. The explosion happened whilst he was still in the car, and how he managed to escape is an utter miracle."

The Liverpool Women’s Hospital said in a statement late Sunday night it has restricted visiting access until further notice, but patients were no longer being diverted to other hospitals.