Kensington arrests: A normal Friday morning, then 12 police cars arrived

The men were holed up in a small flat on the fourth floor of block K of the Peabody housing estate in North Kensington. Living all around the hideout of the two suspected suicide bombers were families, many with young children enjoying the first week of the school holidays.

The low-rise 1930s housing project together with two other estates forms a rabbit warren of dwellings just a quarter of a mile from where a discarded bomb was found in Little Wormwood Scrubs recreation ground last Saturday. As they pulled into the estate, the heavily armed officers got out of the vehicles and fanned out. Some, now wearing respirators or carrying shields, went to the front of the block. The remainder approached from the rear.

But as the first officer kicked on the door below the flat where the two men were hiding, the operation seemed as if it was about to go terribly wrong. A young child, no more than six years old, was intrigued by what was going on and came right up to a policeman holding a machine gun as he attempted to gain entry to the flat.

Police feared they could be about to enter the scene of a deadly last stand by the suicide bombers. To the innocent minds of children, it was just another game. Moments later a second child appeared and the officer withdrew, shepherding the two youngsters to safety.

Alan Simpson, 42, had spotted the police arriving. "It was surreal. They were moving so slowly I though it was a funeral procession," he said. From his flat in block P, directly across the tree-lined courtyard to the rear of the premises where the men were hiding, he could see the black helmets of the officers bobbing up and down above the low balcony wall.

"They shouted 'armed police'," Mr Simpson said. The man next door to the flat at the centre of the search came out, dressed in his bus driver's uniform. He was of east African origin, said neighbours, and he had his hands up. Some recognised him from the No 7 bus. He was taken away from the scene for his own safety.

But the other men were not giving up so easily. By now the police were crouched at the end of the corridor 20 feet from the entrance to the flat. A helicopter was overhead. Some residents had been told to stay in their homes, others evacuated. The whole area was sealed off. "They kept shouting but nothing happened," Mr Simpson said.

Another neighbour, a young mother who asked not to be named, described the tense dialogue. "The police said to him that if he doesn't come out and take off his clothes down to his underwear, with his hands up they were going to have to come in. 'Why do I need to come out in my underwear?' he said.

"They said to make sure he hadn't got any explosives on him. He sounded very scared, I don't know if he was crying but he sounded tearful. He kept asking 'how do I know you won't shoot me?' They were telling him he wouldn't be hurt if he obeyed their orders; they kept saying 'you have to come out, you have to come out,' through their loud-hailer."

Lisa Davis, a witness, said the police made persistent efforts to convince the man that he would be "safe" if he gave himself up.

"They keep asking him, 'is there a reason that you shouldn't leave the flat?" she said. According to Josephine Knight, a 55-year-old social worker for Westminster City Council: "The police were shouting, 'Mohammed, Mohammed come out. We won't hurt you"'.

Mr Simpson added: "They were shouting and shouting, but then it all went quiet. Nothing happened." Others described how police repeatedly used the name Mohammed to soothe the suspect. Around midday two officers, crouching low, scuttled up to the rear door of the flat and attached charges to the door. "There were massive explosions and more shouting but still nothing happened," said Mr Simpson. Still they did not give themselves up.

More time passed. After half an hour, a marksman stepped up to the bathroom window and took aim. There were more shouts of "Mohammed" and then the sound of more shooting, this time from the front of the flat. There was a warning and then three shots as CS gas canisters were fired inside. "There were more shots, low thuds and then the two men came out on the balcony. They had shaven heads. They were both burly but they had snot pouring out of their noses. Their eyes were streaming. They were naked from the chest up. They were walking slowly backwards towards the edge of the balcony with their hands on their head," said Mr Simpson. The police grabbed them and handcuffed them separately. They spat repeatedly over the balcony as they were told to remove their lower garments. They were led separately into the flat where more than a dozen officers were searching for traces of explosives or bomb-making equipment. Just after 2pm, the men, dressed in white suits to safeguard forensic evidence, were taken away in two unmarked police cars. The operation had been a success.

'We've got a siege here'

A neighbour, Lisa Davis, described the scene at Dalgarno Gardens live on television. This is a transcript of her running commentary.

"I can see two of them [police] now. They are screaming and they have got the guns pointed upright at the flat.

There was a bomb that went off, followed by gunfire.

Now we have got a siege situation by the looks.

'Take your clothes off' is what they are telling him, 'exit the building', they keep saying.

'Walk into the corridor and stop' is what they are telling him right now.

They are asking him does he understand.

They keep asking him 'Is there a reason that you shouldn't leave the flat?'

They have been saying this to him for about half-an-hour.

I can see five armed police with guns and shields moving in.

I have got police officers just below the road now running. They are telling everyone to get inside now."