Army bomb experts were examining a van in a housing estate in the North today after police received reports of masked men firing shots.
The security alert began at around 12.20am in the Gobnascale area of Derry.
The scene was sealed off and ammunition technical officers called after reports that a number of masked men had been seen near Campion Court.
Police also had an unconfirmed report of shots being fired.
A PSNI spokeswoman said investigations were continuing and urged members of the public to avoid the area.
“Police are appealing to anyone who has information in contact them,” she added.