Four people died and dozens were injured when a man drove a 4×4 along the pavements of Westminster before stabbing a policeman to death in the parliamentary grounds.
Raids across the country, including London and Birmingham, have taken place overnight, with seven arrests made, police said.
Sir Michael argued the UK’s security services now encountered a new challenge, as terrorists were using more “simplistic” methods.
Sir Michael Fallon warned Britain faced a new type of terror threat
This is a new challenge for our security services
Sir Michael Fallon
Speaking on Sky News, he said: “This is a new kind of terrorism, this is a new challenge for our security services because these are very ordinary things; a 4×4 vehicle or a knife.
“We’re also dealing with terrorists who don’t want anything, they don’t want to negotiate, they don’t want to take hostages, they’re simply out to kill as many people as possible, completely innocent people, including foreign tourists.”
Those killed were Spanish national Aysha Frade, a man in his 50s, police officer Keith Palmer and the attacker responsible.
A minute’s silence will be held at 09:30 in the Houses of Parliament to remember those affected by Wednesday’s incident.
Sir Michael said Londoners were London Terror Attack: LATEST PICTURES Thu, March 23, 2017
5 dead and 40 injured in Westminster terror attack
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Concrete blocks en route to reinforce security in London
Sir Michael remained defiant as he continued: “Londoners are taking it on the chin”.
“London is going back to work,” he said. “Coming to Westminster today I passed school children, I’ve heard school trip are going ahead, people are going to their offices and jobs.
“London has seen terrorism before and London has faced it down and the message today is we will get back to normal as quickly as possible.
“Parliament will be meeting at its normal time today and conducting its normal business was a statement later on from the prime minister.
“I do want to reassure people security agencies are working around the clock now to make sure this attack is investigated and we can be protected against future ones.”