Armed police were scouring miles of countryside today as the net closed in on suspected killer Raoul Moat.
Investigators believe the former bouncer may have fled on foot after abandoning his car in Rothbury, Northumberland, along with two men held as possible accomplices.
Marksmen from several forces were searching abandoned buildings, forests and grassland on the edge of the Northumberland National Park.
One team used dogs to check derelict buildings known as Pike House, a short distance south east of the rural village, 30 miles north of Newcastle.
Senior police officers set up a two-mile exclusion zone around the village as they announced the net was closing in on the gunman.
In a letter, Moat declared war on the police, who he blames for taking away his children, freedom and former girlfriend.
He said: "The public need not fear me but the police should as I won't stop till I'm dead."
The dramatic manhunt was played out on live television through images beamed back via a helicopter hovering overhead.
The focus of the massive operation swept to Rothbury after Moat's black Lexus saloon was found parked in an industrial car park beside the River Coquet.
Residents alerted police after investigators revealed details of the vehicle late last night but said the car had been there all day.
Detective Chief Superintendent Neil Adamson, who is leading the manhunt, said the two men were arrested as they walked beside a road near Rothbury.
He revealed they were being questioned on suspicion of conspiracy to commit murder, but declined to go into further details.
Speaking at a press conference, Mr Adamson appealed once again to Moat to hand himself in to police.
He said: "Mr Moat, I have a further message for you. I have made a number of requests to you to contact police and hand yourself in. That opportunity still exists.
"Please remember what I have said to you before. Do not leave your children with distressing memories of their father. You still have a future. Give yourself up now."
Moat became Britain's most wanted man after he shot his ex-partner and killed her new lover in the early hours of Saturday morning.
The steroid-abusing father-of-three targeted Samantha Stobbart, 22, hours after he was released from Durham Prison where he served a short sentence for assault.
It emerged today that Moat has been arrested 12 times and charged with seven separate offences.
Miss Stobbart was left in a critical condition and karate instructor Chris Brown, 29, was killed in the shooting in the Scafell area of Birtley, Gateshead.
Almost 24 hours later, married father-of-two Pc David Rathband, 42, was shot in his patrol car at a roundabout in East Denton, Newcastle.
Police released a photograph of Pc Rathband, who is recovering, showing his face and shoulder ripped apart by the shotgun blast.
Investigators later revealed that Moat dialled 999 12 minutes before the attack and threatened to shoot a police officer. He rang back 50 minutes afterwards.
A media blackout was imposed last night after reports emerged that Moat was holding two men hostage, but it was lifted this morning after they were found.
Moat had boasted of kidnapping the two men from the Birtley area in a series of taunts through phone calls and in a 49-page hand-written confession.
Mr Adamson said police were engaged in a complex and fast-moving inquiry in which eight separate operations had taken place.
He said police had "reason to believe" that Moat was still in the Rothbury area, but were not making any "leaps of faith either way".
He said: "What I want to stress to the wider public is I would love to be in a position to let the wider public know what is going on behind the scenes. There is a huge amount of effort going on.
"The public see our activity through you as a medium to communicate what we are doing.
"There is an awful lot happening in an investigation that is taking a lot of resources and co-ordination. I just want to stress that fact.
"I cannot explain for obvious reasons, but there is an awful lot of work going on.
"If I can finish by saying the police priority still is, and always has been, to locate Moat and deal with him and that is our number one objective."
Northumbria Police Temporary Chief Constable Sue Sim said people should not travel to Rothbury and residents should stay indoors.
She said: "Can I stress to the public that Moat is still at large and we need to locate him."
Graham Noble, of Thrum Mill Farm, Rothbury, said his family have been advised to stay inside.
He said the Lexus had been in the village all day yesterday, adding: "If they had released the details earlier, somebody would have said."
Armed police were guarding Dr Thomlinson Church of England Middle School as the force helicopter continued to sweep fields nearby.
The school referred all media inquiries to Northumberland County Council, which refused to comment on what was going on.
Officers in white forensic suits wearing masks were seen walking away from where the Lexus was found, and heading along a path into woodland by the river.
It came amid reports that there was evidence that people had been camping out nearby.
The black car has been taken away by police for analysis.
The police helicopter continued to fly over farmland south of the village, while locals speculated that Moat could be hiding in the area around Cragside, a popular National Trust property across the valley from where the saloon was discovered.
Steven Bridgett, the Northumberland county councillor for Rothbury, said police were searching an area of dense foliage at the back of his house on Jubilee Crescent.
He said the area being investigated is locally called the Whitton area, and it backs on to the Dr Thomlinson Middle School.
People have been asked to remain inside the school until they are given further instruction, he said.
Mr Bridgett said: "When I first got the text messages, I thought people were joking.
"The area that they are searching now is called the Whitton area. It's a large area."
Police told him to inform people in Rothbury about what was happening in the village.
"The local inspector contacted me to ask all local residents to stay indoors and remain vigilant.
"I wouldn't say people are afraid but they are aware of what's going on.
"They want the police to catch this man and put an end to all of this."
Police announced that the two-mile radius exclusion zone around Rothbury remained in place, as did the air exclusion zone.
"Police continue to advise the public to stay indoors as a precautionary measure and await further instructions," a force spokesman said.
"We have armed police officers on the streets who are there to protect and reassure the public.
"We are working closely with the local authority and are advising parents that children at school in Rothbury will be kept in school at the moment, where they will be looked after by teaching staff.
"We are seeking the co-operation of parents and residents during this time as no one will be allowed in or out of Rothbury until further notice.
"A reception centre has been set up at Longhorsley First School where local authority staff, police officers and health staff will provide support to anyone returning to Rothbury who is unable to do so.
"Alternately, people should make alternative arrangements to stay with friends or relatives outside the Rothbury area.
"These are precautionary measures while police searches are under way. We thank the public for their cooperation, patience and understanding during this challenging time."