Police placed the Houses of Parliament on lockdown as armed officers responded to reports of a man with a knife outside.
Witnesses said a man had been tasered by police, and images shared on social media appeared to show a suspect wearing a grey hoodie being held at gunpoint and then handcuffed.
Police said one suspect in his 30s had been arrested on suspicion of possession of a knife "near to the Palace of Westminster".
In a statement, the Metropolitan Police said officers "became aware of a man acting suspiciously" at 11.10am near the Carriage Gates to New Palace Yard, the scene of the terrorist attack on 22 March in which PC Keith Palmer was stabbed to death.
"The officers approached the man in order to speak with him. The man reached for a knife, and police discharged a Taser," police said.
"Nobody was injured," police said. The incident is not being treated as terror-related at this stage.
Armed police ran to the scene of the commotion, which was heard and witnessed by a large number of people on Parliament Square.
Joe Murphy, the political editor of the Evening Standard, said there were shouts of "knife knife knife" before a man was brought down by police with a taser.
The gates to the Palace of Westminster were then shut and journalists inside told they cannot leave. St Stephen's Gate and Carriage Gate were locked, with a number of police vehicles and officers gathered in New Palace Yard.
After around 45 minutes the lockdown was lifted, and people allowed to leave the Palace.
The suspect was being held just a few yards from new security railings that were brought in as part of a tightening of security following the fatal stabbing in March.
A review of security at the perimeter of the parliamentary estate was ordered by Commons Speaker John Bercow following the incident.
The use of armed officers and physical barriers has become more visible, while a permanent barrier has been erected to protect pedestrians on Westminster Bridge, where Islamist terrorist Khalid Masood murdered four people and injured more than 50 others by mounting the pavement in a car.Reuse content