Police say the dramatic arrests of a man and a woman in North Melbourne by the counter-terrorism taskforce on Friday afternoon was "intelligence gathering" and not related to a specific incident.
The Joint Counter Terrorism Team arrested a man and a woman on the footpath out the front of St Mary's Anglican Church in North Melbourne about 2pm.
A police statement released at 7.30pm described the arrests as a "routine operation", that two people were still being questioned and no one had been charged.
"This operation is not linked to a specific incident and is part of the JCTT's ongoing intelligence gathering, the statement said.
"It is also not linked to any imminent threat and the community should be assured that there is no ongoing risk as a result of this operation."
ABC journalist Virginia Trioli witnessed the dramatic arrests by chance.
"There was yelling and vicious barking of dogs outside St Mary's church on Queensberry St and I saw counter terrorism police fully kitted out in camouflage and helmets and weapons that I've simply never seen before," Trioli said.
"There was one man on the ground and a woman kneeling on the opposite corner, very quiet and passive. There were plain clothes detectives and uniformed police and the bomb squad as well, and it was incredible to see on a leafy north Melbourne church corner.
"After a while they took the two away in white Hazmat suits."
Backpacker Axel Morel was across the road from the church and saw a man handcuffed and sitting against the church fence with an officer in camouflage gear holding a high powered gun standing beside him.
"It was weird. Strange. Really strange," he said.
He said he saw police get the man to put on a white forensic suit.
Police remain at the Bedford Street apartment block about 300 metres away.
Officers are wearing forensic suits and can be seen from the street through the windows on the stairwell of the first floor.
Police are focusing on an first-floor apartment. It's believed a man and a woman had been living there, residents said.
Officers have been seen taking photographs inside.
Witnesses reported seeing police with guns drawn near the corner of Howard and Queensbury Streets shortly after 2pm.
Police earlier confirmed the operation in a statement.
"The Joint Counter Terrorism Team Melbourne can confirm it is conducting operational activity in North Melbourne.
"We can confirm two people are currently assisting with enquiries.
"There is no current or impending threat to the community. It would not be appropriate to comment further at this time."
Witnesses saw one man being detained by police outside the church, on the corner of Queensberry and Howard streets.
A resident of the Bedford Street building who had come downstairs to pick up his Deliveroo order said police were in the stairwell.
It's believed the man arrested outside the church was living in the building.
"It's so scary," said the resident, who did not want to use his name.
The Joint Counter Terrorism Team includes officers from Victoria Police and the Australian Federal Police.