LIVERPOOL, Nov 15 — An explosive device that blew up a taxi in the northern English city of Liverpool yesterday was carried on board by a passenger and the blast is being treated as a terrorist incident, police said today.

Police said they believed they knew the identity of the passenger, who was killed by the explosion, but could not disclose it.

"Our inquiries indicate that an improvised explosive device was manufactured, and our assumption so far is that it was built by the passenger in the taxi,” said Assistant Chief Constable Russ Jackson of Counter-Terrorism Policing Northwest.

"Although the motivation for this incident is yet to be understood, given all the circumstances, it has been declared a terrorist incident,” he said.

The explosion engulfed the taxi in flames outside Liverpool Women’s Hospital just before 11 a.m. yesterday, when a Remembrance Day service to commemorate war dead was being held at nearby Liverpool Cathedral.

"We cannot at this time draw any connection with this but it is a line of inquiry which we are pursuing,” said Jackson.

Three men aged 29, 26 and 21 were arrested on Sunday, and Jackson said today another man aged 20 had been arrested. He added that "significant items” had been found at one address while several other addresses had been or would be searched.

He said the passenger had boarded the taxi at a location in Liverpool and asked to be driven to the hospital, which was about a 10-minute drive away. The blast took place within the car as it approached the drop-off point in front of the hospital.

The driver managed to escape from the vehicle but was injured and received medical treatment. He has since been released.

Jackson said it was unclear why the passenger had wanted to go to the hospital or what had caused the sudden explosion of the device.

Earlier, Liverpool Mayor Joanne Anderson described the actions of the taxi driver as heroic. The BBC said he had locked the passenger inside the vehicle.

"The taxi driver, in his heroic efforts, has managed to divert what could have been an absolutely awful disaster at the hospital,” she told BBC radio.

Prime Minister Boris Johnson praised the driver’s "incredible presence of mind and bravery”, though he did not elaborate on the circumstances. Johnson planned to chair a meeting of the government’s emergency committee on Monday to discuss the blast. — Reuters