RESIDENTS fear an armed police raid in Old Town could be drug or gun-crime related.

Mystery surrounds yesterday's operation as undercover officers outside the house in North Street declined to comment.

But neighbours say armed police surrounded the building shortly after 1.45pm.

They also believe two men, of a European nationality, were taken out of the house, handcuffed and taken away.

And many residents saw search teams, which included police dogs, sift through rubbish bags.

Marlene Russell, 59, of Dover Street, said she could hear the raid from her home.

"The officers banged on the door and shouted for anybody in there to come outside and said if they didn't they would assume they were hostile," she said.

Mrs Russell's daughter, Elaine, of Nythe, who was visiting with her three-year-old daughter, Harley, was forced to abandon her car to get to the house because roads were cordoned off.

"There were armed police with dogs everywhere," she said. "I heard some men got into a people carrier and sped off before all the police arrived," she said. "We didn't know what was going on. It's shocking when it happens on your doorstep."

Steve Stuart, 36, owner of The Little Film Shop, on the corner of Eastcott Hill and North Street, believes that undercover officers were watching the street before the raid.

"I thought it was one of my customers at first," he said. "Then all the cop cars came at once. Then they were stopping, searching and questioning people as they came through.

A drinker at The Globe pub in Eastcott Hill said he heard the raid was something to do with drugs or guns.

"It must have been something serious for so many police cars to be around," he said.