Police say more than 100 homes remain evacuated in Cheltenham after bomb disposal experts carried out four controlled explosions on Saturday.
Two men have been arrested under suspicion of terrorism offences.
The explosions were carried out at a garage block less than a mile from GCHQ, the government's communications headquarters.
The alarm was raised on Friday following raids at two properties in the Gloucestershire spa town.
Officers initially searched a home in Brooklyn Road, Hester's Way, where they arrested a 52-year-old local man under the Explosive Substances Act.
Police then found items "requiring further investigation" in a garage in Buttermere Close, in the Up Hatherley area of the town.
A 31-year-old man was subsequently arrested, Gloucestershire Constabulary confirmed.
In the meantime, the force's Assistant Chief Constable Richard Berry said he was grateful to local people for their support and patience during a "thorough and methodical" investigation.
"At the moment we unfortunately are not able to say when we will be able to lift the cordon (in Buttermere Close)," he added.
"It remains in place for the public's safety and we have seen that it is justified by the results of the search thus far.
"However we will endeavour to return the area to normality as soon as practicable when we can ensure there is no risk of harm to local residents."
A rest centre has since been set up for residents evacuated from their homes in St Margaret's Hall for those needing support.
There, care staff from NHS Gloucestershire will be on duty to provide information and advice on medication and health concerns.
Chief Executive of Cheltenham Borough Council 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."
Earlier on Saturday, police confirmed they had re-arrested two men who had initially been detained the previous evening.
A spokesman said: "The two men arrested in Cheltenham yesterday, have both been further arrested on suspicion of the commission, instigation or preparation of a terrorist act (contrary to the Terrorism Act 2000).
"This relates to examination of the items found in a garage in Buttermere Close in the Up Hatherley area of Cheltenham.
"The South East Counter Terrorism Unit has assumed responsibility for the ongoing investigation but will continue to work closely with Gloucestershire Police.
"The 52-year-old man and 31-year-old-man are both from Cheltenham. They remain in police custody at this time."