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British police say the sole suspect in the stabbing of three people in the English city of Manchester on New Year's Eve has been detained under Britain's Mental Health Act.

The attack, which police are treating as a terrorist incident, took place at Manchester's Victoria Station. The train station is next to the Manchester Arena, the site of a May 2017 suicide bombing that killed 22 people at a pop concert.

Greater Manchester Police said in a statement that the 25-year-old man arrested at the scene was assessed by medical staff before the decision was reached.

The suspect has not been identified and police have not explained a possible motive for the attack.

Officials say verifying that the suspect acted alone without a support network is a key objective of the investigation, which is being headed by counterterrorism police. Police searched the suspect's home in Manchester for evidence.

He is accused of stabbing three people, including a British Transport police sergeant, at the train station Monday night while shouting Islamic extremist slogans.

He was arrested on suspicion of attempted murder, but with the latest development, it's possible he may be found to be too impaired mentally to be held criminally responsible for the stabbings.

Two of the victims - a man and a woman - are still hospitalized with serious injuries but authorities say they are not life-threatening. The policeman who was stabbed in the shoulder when he came to their aid has been released from the hospital.

Britain's official threat level has long been set at "severe," indicating that intelligence analysts believe an attack is highly likely.