"The driver of the auto, a man in his late 20s. was arrested on suspicion of terrorist offenses", said police.
Armed police swooped into the area, cordoning off streets surrounding the heart of Britain's government.
Police say an incident in which a auto was driven into a barrier near the Houses of Parliament appears to be a deliberate act, but the suspect under arrest is not cooperating. An armed officer shot the attacker, who died at the scene. Four people were killed in that incident when a 52-year-old British man, Khalid Masood, rammed a rental vehicle onto the sidewalk on Westminster Bridge.
Witnesses described the auto as being driven at high speed before hitting barriers.
The Palace of Westminster, where Parliament convenes, bolstered security around the buildings in March 2017, after Khalid Masood drove his vehicle into crowds along Westminster Bridge, killing four people.
The police released a statement on their website that said: "The Metropolitan Police's Counter Terrorism Command is investigating an incident in Westminster this morning during which a number of people were injured".
Two people were taken to hospital, and one was still receiving treatment for serious but not life-threatening injuries.
The suspect, who has not been formally identified, was not cooperating with detectives, police said. "I heard some noise and someone screamed", she said.
One man has been detained on suspicion of terrorist offences, after the auto he was driving hit pedestrians and crashed into a barrier outside the UK Parliament. "I turned around and I saw a silver vehicle driving very fast close to the railings, maybe even on the pavement".
Police have been searching addresses in the Midlands after a auto smashed into barriers near Parliament on Tuesday morning. He is being held at a south London police station.
The cordon has been extended past the Cenotaph on Whitehall - a five-minute walk from the scene at Old Palace Yard.
There will be an increased police presence in Scotland, England and Wales following the incident at Westminster.
The Islamic State terrorist group claimed responsibility for the attack.