Two men held after suspicious items were found in a garage in Cheltenham on Friday are to be questioned over terrorism offences.
Initially arrested under the Explosive Substances Act, the pair aged 52 and 31 have been further arrested on suspicion of the commission, instigation or preparation of a terrorist act.
It follows the examination of items police found in a garage in Buttermere Close in the Up Hatherley area.
A 200-metre cordon remains in place.
The South East Counter Terrorism Unit has assumed responsibility for the ongoing investigation but will continue to work closely with Gloucestershire Police.
Residents from about 100 houses were evacuated as a precaution after the discovery and have not been allowed to return to their homes.
A Gloucestershire Police spokesman said he was unable to say when the cordon will be lifted.
Cheltenham Borough Council has set up rest centres in two community halls nearby to accommodate displaced residents.
Chief Executive Andrew North said: "The joint working with Gloucestershire Police and other agencies has been fantastic.
"We understand how distressing this may be for a number of Cheltenham residents but people should be reassured that we will get things back to normality as soon as possible."
Assistant Chief Constable for Gloucestershire Constabulary Richard Berry said: "We cannot thank the community enough for their continued support and patience during what is a thorough and methodical investigation."