The device went off while the train was stopped at the southwest London station, injuring at least 29 people.
The Mayor of London, Sadiq Khan, said: "The national threat level has now been raised to critical after the evil and cowardly terrorist attack at Parsons Green". He said the investigation is ongoing and the terror threat level remains at "critical".
The UK terror threat has been increased to its highest level as police continue the hunt for the person behind the Tube bombing in south west London.
Police say the man has been arrested by Kent police in the port area of Dover on the English Channel.
"We are still pursing numerous lines of enquiry and at a great pace", counterterrorism co-ordinator Neil Basu of the London police said late Saturday.
The Met's head of national counter terrorism policing, Mark Rowley, added that the independent Joint Terrorism Analysis Centre has raised the UK's threat level from global terrorism to critical.
"The public should remain vigilant as our staff, officers and partners continue to work through this complex investigation", Basu said.
Friday's device reportedly contained the explosive triacetone triperoxide (TATP) and nails, but is thought to have only partially detonated from inside a bucket.
The attack sparked a huge manhunt for a potential network of plotters, with the country's top counter-terrorism officer suggesting more than one suspect could have been involved.
A USA law enforcement source told CBS News senior investigative producer Pat Milton the device used in the attack was a white plastic bucket with a black cloth on top, with wires believed to be Christmas lights coming out of the bucket.
Most people were treated for minor injuries and have been released, the London Ambulance Service said, adding that three people remain in the hospital.
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