LONDON - A British soldier was hacked to death by two men shouting Islamic slogans in a south London street on Wednesday, in what the government said appeared to be a terrorist attack.

Video footage filmed by an onlooker just minutes after the killing showed an angry man with hands covered in blood, holding a bloodied meat cleaver and a knife.

A police forensics officer investigates a crime scene where one man was killed in Woolwich, southeast London May 22, 2013. [Photo/Agencies]

"You people will never be safe. Remove your government. They don't care about you," the man, a black man in his 20s or 30s wearing trainers and jeans and speaking with a local accent, said in the footage obtained by  Britain's ITV news channel.

"I apologise that women had to witness that, but in our lands our women have to see the same thing," the man said.

Police said they later shot two suspects who were carrying weapons and took them into custody.

Prime Minister David Cameron cut short a visit to France to return to London and chair an emergency national security meeting. He said there were strong indications that the killing was a terrorist incident.

The attackers pounced on the victim in broad daylight in a street in the southeast district of Woolwich near an army barracks.

After making his remarks in the video, the man with the bloody knives walked back to the scene and spoke to the other attacker casually.

Media quoted witnesses as saying the attackers had shouted "God is greatest" in Arabic while stabbing the victim, whom they tried to behead.

Witnesses said the victim was wearing a T-shirt saying "Help for Heroes", the name of a charity formed to help wounded British veterans. Britain has had troops deployed in Afghanistan since 2001 and had troops in Iraq from 2003-2009.

"The police are urgently seeking the full facts about this case but there are strong indications that it is a terrorist incident," Cameron said before cutting short talks with French President Francois Hollande to return home.

"We have had these sorts of attacks before in our country and we never buckle in the face of them," he said.

The authorities did not immediately confirm the identity of the victim, but a source said it may have been a member of the military.

Police sealed off streets around the Woolwich area in southeast London and helicopters hovered overhead after the attack. Pools of blood stained the street.

"I am afraid it is overwhelmingly likely now to be a terrorist attack, the kind the city has seen before," London mayor Boris Johnson said in televised remarks.

"LONE WOLVES"

London was last hit by a serious militant attack in July 2005, when four young Islamists set off suicide bombs on the public transport network, killing 52 people and wounding hundreds. A similar attempted attack two weeks later was thwarted.

British counter-terrorism chiefs have recently warned that radicalised individuals, so-called "lone wolves" who might have had no direct contact with al Qaida, posed as great a risk as those who plotted attacks on the lines of the 2005 bombings.

The bombing attacks on the Boston Marathon last month, which US authorities blame on two brothers, have raised the profile of the "lone wolf" threat in the West. A French-Algerian gunman killed three off-duty French soldiers and four Jewish civilians on a rampage in southern France last year.

Britain's involvement in the wars in Afghanistan and Iraq in the past decade has often stirred anger among British Muslims and occasionally made soldiers a target at home. British police have foiled at least two major plots in which Islamist suspects were accused of planning to kill off-duty troops.

Local residents expressed shock at Wednesday's killing.

Fred Oyat, a 44-year-old local resident, said he witnessed the attack from the window of his high-rise apartment overlooking the scene.

"The victim was white," he said. "I was in my house when four shots rung out. I went to the window I saw a man lying on the ground with a lot of blood."

Ahmed Jama, a 26-year-old resident, laid flowers down at the scene as a sign of respect to the families involved.

"This has nothing to do with Islam, this has nothing to do with our religion. This has nothing to do with Allah," he said "It has nothing to do with Islam. It's heartbreaking, it's heartbreaking."

A number of weapons were reportedly used in the attack, including a firearm, police said. Security has been tightened at all London barracks.

Home Secretary Theresa May said in a statement: "This is a sickening and barbaric attack."