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were questioning three men on Monday after a "heroic" taxi driver reportedly foiled a plot to bomb a packed Remembrance Day service in Liverpool.

An engulfed a cab outside Liverpool Women's Hospital seconds before Britain fell silent at 11:00 am (1100 GMT) on Sunday to honour its war dead.

A passenger was killed but the driver escaped with light injuries, after city authorities and newspapers described how he had locked the man inside after growing suspicious about his intentions.

The passenger had wanted to go to the annual Remembrance Day service in the northwest city's Anglican cathedral, according to UK media quoting investigators and friends of the cabbie.

But road closures forced the taxi to detour and they ended up at the nearby hospital, where the bomb went off just after the driver had escaped, the Daily Mail reported.

Today is the day we remember our fallen heroes.

Today also introduced us to a NEW hero.

This is David Perry, a brave cab driver, who single-handedly stopped a major terrorist attack in Liverpool.

— Mahyar Tousi (@MahyarTousi)

The taxi went up in a fireball and thick grey smoke billowed afterwards, as police rushed to cordon off the hospital and non-urgent patients were told to divert to other city clinics.

"The taxi driver, in his heroic efforts, has managed to divert what could have been an absolutely awful disaster at the hospital," Liverpool Mayor Joanne Anderson said on Monday.

"We knew that the taxi driver had stood out and locked the doors, we knew that early on," she told BBC radio, while warning against further speculation about the incident.

Some 2,000 people attended the religious service of remembrance, according to the Liverpool Echo newspaper, and the event concluded with a military parade on the closed roads outside the cathedral.

Remembrance Day marks the moment at 11:00 in November 1914 when the guns fell silent in World War I. The commemoration in Liverpool was one of Britain's largest, outside London.

Senior Conservative politician Oliver Dowden said the driver's actions contrasted with "the cowardice of terrorist attacks".

"Clearly we'll have to see exactly what happened there," the ruling party's co-chairman told Sky News on Monday, stressing reports of the driver's response had to be confirmed.

"But if that is the case, that's another example of true bravery and courage," Dowden said.

After the incident, armed police from England's Northwest counter-terrorism command arrested three men - aged 29, 26 and 21 - in a house in Liverpool's Kensington district.

Sections of the street remain cordoned off with a heavy police presence at the scene early Monday.

The MI5 intelligence service is also assisting in the investigation, according to The Guardian newspaper and BBC.

"So far we understand that the car involved was a taxi which pulled up at the hospital shortly before the explosion occurred," Merseyside Police said in a statement late Sunday.

"We would urge the public to remain calm - but vigilant," they added, stressing they were keeping an open mind as to the cause of the explosion.

On Twitter, Prime Minister Boris Johnson praised the emergency services for their response, and he was expected to update parliament later Monday.

Home Secretary Priti Patel said: "Our police and emergency services are working hard to establish what happened and it is right they are given the time and space to do so."