Theresa May has said Britain is experiencing a new trend of "brutal terror".
Her speech on the steps of 10 Downing Street came hours after three suspects killed seven people and injured 48 at London Bridge and Borough Market.
She said the suspects wore fake suicide vests to "spread panic and fear".
“We cannot and must not pretend that things can continue as they are,” she said.
“Things need to change, and they need to change in four important ways.”
She talked about military action in places like Syria, combating extremism at home - having "frankly embarrassing conversations" - working with Internet companies and allied democracies across the world to regulate cyberspace and fight growing extremism online.
“Defeating this ideology is one of the great challenges of our time, but it cannot be defeated through military intervention alone.”
Ms May said Islamist ideology “cannot be given the space to breath”, and new cyberspace regulations are needed with international partners.
“We need to defend British pluralistic values that are superior to anything offered by preachers and supporters of hate," she added.
She praised police for arriving on the scene "within moments" and shooting dead the three suspects "within eight minutes". She claimed authorities had disrupted "five credible plots" of terrorists since the attack on Westminster bridge in March, and that the latest attack was not connected to previous deadly incidents.
A total of 48 people are injured in hospitals across London, with many suffering from serious injuries.
She said all of these attacks are bound together by an evil ideology that is a perversion of Islam and a perversion of the truth.
Ms May urged everyone go about their lives as normal and said the General Election would go ahead on Thursday.
Most parties have suspended campaigning on Sunday, but will resume as normal on Monday.
Ms May chaired an emergency Cobra meeting following the attack and then gave the speech.
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