Multiple Bombs Discovered in Thwarted London Plot

British and US officials are increasingly convinced that two cars found in London and laden with explosives were part of a foiled "terror plot involving Islamic extremists."

ABC News has learned that police have a clear closed-circuit television camera image of the driver of one vehicle left near Piccadilly Circus. They believe the man on the video is a known associate of jailed Islamist militant Dhiren Barot.

The two cars, both filled with "fuel, gas canisters and nails" and found near each other in central London "are clearly linked" to each other, said Peter Clarke of Scotland Yard's anti-terror command.

The first bomb, found in a silver-green Mercedes parked in Haymarket near Piccadilly Circus in the early morning hours Friday, was defused by police technicians. Later that day, police identified a suspicious blue Mercedes near Hyde Park and subsequently cordoned off Park Lane, a busy thoroughfare.

British police defused the Piccadilly Circus car bomb, made from 33 gallons of gasoline and capable of causing "significant loss of life." The bomb also included propane canisters and nails and was wired to be detonated by cell phone.

Watch World News with Charles Gibson at 6:30 p.m. EDT for the latest developments on the story.

The target of that car bomb may have been the Tiger Tiger nightclub just around the corner, with hundreds of people inside.

A robot was used to investigate the suspicious vehicle found on Cockspur Street near Park lane.

By rush hour Friday evening, Fleet Street had been reopened to traffic but Park Lane remained closed as investigators looked for a possible link to the suspicious vehicle there and the Piccadilly Circus car bomb.

Police called on Londoners to remain vigilant and promised to minimize disruptions to traffic as much as possible.

"I'd ask Londoners to be alert and report anything suspicious to the police," said Tarique Ghaffur, an assistant commander at Scotland Yard. "In incidents of this nature there is disruption and we're trying to minimize that, we're grateful to the public for their continued reporting and continued vigilance. We are working under tried and tested systems, many of which were brought in after 7/7."

Word of the Piccadilly Circus car bomb came in the early hours of Friday morning from an ambulance driver who was treating someone nearby and saw smoke coming from a blue Mercedes shortly after it careened into a barricade. The driver had apparently fled.

The alert brought central London to a standstill. Police cordoned off parts of Piccadilly Circus and surrounded the car.

Calling the device a "significant bomb," bomb technicians first approached the car with a robot. The smoke inside the car was so thick that the robot's camera could not record anything, sources said.

A bomb technician in a heavy kevlar suit approached the car and, sources say, was surprised to find a carefully constructed bomb. The bomb contained 33 gallons of gasoline in containers stuffed onto the car's right front seat and in its trunk. Also in the car were cylinders of propane and butane.

At great personal risk, sources say, the bomb technician then defused the bomb by hand.

According to U.S. security officials briefed on the matter a cell phone was to be used as a detonator.

The incident happened just hours after newly installed British Prime Minister Gordon Brown announced his new Cabinet. He said the British people must remain vigilant

"As we have said on so many occasions, we face a serious and continued security threat to our country," Brown told reporters outside his residence at 10 Downing Street.

Scotland Yard's Peter Clarke told reporters the incident shows the terror threat "is real, it is here and it is enduring."

A British government source told ABC News that the authorities here in the middle of investigating significant anti-terror activities right now, with a number of investigations under way at once, including ones with links to Pakistan and al Qaeda.

London is just days away from the anniversary of the July 7, 2005, bombings that killed 52 people. There have long been fears of a repeat, with authorities monitoring both homegrown terrorists and threats outside the country.

In Washington, President Bush commended the swift action of British authorities and pledged U.S. support in the ongoing investigation.

"We commend the British security services for their action today. U.S. officials are in contact with their U.K. counterparts and will continue to monitor the situation. Bush was informed this morning during his daily briefing," said Gordon Johndroe, National Security Council spokesman.

White House spokesman Tony Snow said the president has yet to speak with the newly appointed Prime Minister Gordon Brown or other British officials but "if they need anything, they'll get it."

The FBI is working closely with the British, checking on the registration of the vehicle, trying to determine who the driver might have been, and if they get any names, looking for associates to see if those people have been to the United States. The July 4 holiday is approaching, and U.S. officials are always concerned about that holiday.

Michael Chertoff, secretary of Homeland Security, said there was no threat to U.S. security but called on Americans to be vigilant over the holiday.

"At this point, I have seen no specific, credible information suggesting that this incident is connected to a threat to the homeland," he said.

ABC News has reported for a while on disturbing evidence that terror groups have been specifically training agents to wreak havoc in Europe and the United States, using bombs.

ABC's Brian Ross just three weeks ago reported on a video of an alleged al Qaeda terrorist graduation ceremony, claiming that suicide bomb teams were to be dispatched around the world. The video, obtained by ABC News from a Pakistant journalist, shows the men going through a terror training camp somewhere in Pakistan. Teams of 50 to 60 men were supposedly dispatched to Europe and the United States after the ceremony.

The existence of the tape put British and German security experts on edge. As well, it was just last year when an al Qaeda operative was convicted in a London court of planning suicide attacks in London and the United States using limousines, not unlike the car discovered in London this morning. It is too early to know if today's incident was the work of al Qaeda .

British officials are also checking gas and chemical trucks, cement trucks, limousines as well as all vehicles coming to and from the famed Wimbledon tennis tournament that began this week outside London.

ABC News' Brian Ross, Pierre Thomas and Richard Esposito contributed to this report.