Sombre-looking lawmakers in a packed House of Commons chamber observed a minute's silence with bowed heads.
With MPs projecting an air of "business as usual," armed police arrested eight people in raids linked to Wednesday's deadly assault carried out in the shadow of Big Ben that sowed panic in the heart of London.
Around 30 people were treated in hospital, including seven in critical condition, some with "catastrophic" injuries after the attacker mowed down pedestrians on a nearby bridge before stabbing a policeman at the parliament gates.
As MPs resumed business, police officers lined up outside their Scotland Yard headquarters nearby for a minute's silence in front of the eternal flame to those officers who have given their lives in service.
A packed parliament paid tribute, heads bowed.
"We are not afraid and our resolve will never waver in the face of terrorism," said a defiant Prime Minister Theresa May.
Britain had until Wednesday's attack been spared amid a series of deadly jihadist assaults in Europe.
The attack in London came a year to the day after Islamic State jihadists killed 32 people in twin bomb attacks in Brussels.
Britain's top anti-terror officer Mark Rowley said police had raided six houses in London, the central city of Birmingham and elsewhere.
"It is still our belief... that this attacker acted alone yesterday and was inspired by international terrorism," he said.
Rowley acknowledged Muslim communities "will feel anxious at this time" due to previous extreme right-wing attacks and that the police would work with community leaders to ensure protection.
One of those killed was Aysha Frade, who worked in the administration team at a school a few hundred metres away.
Among the injured were three French school children and a number of foreign nationals from China, Portugal, Romania and South Korea.
At the scene of the attack, helicopters circled overhead and a blue forensics tent was in place where the assailant died. Where the policeman was killed, there was blood on the ground.
Hundreds of extra police were on patrol as officers worked around the clock to piece together what happened in the deadliest attack in Britain since four suicide bombers killed 52 people on London's transport system in July 2005.
The British flag over parliament flew at half-mast in a sign of mourning.
Press Association news agency photos believed to be of the knifeman lying on an ambulance stretcher showed a burly man with black clothes and a beard.
Other pictures showed a knife on the cobblestones inside the vehicle entrance gates to parliament, while three shots were heard ringing out on video footage as terrified passers-by fled.
Standing outside her Downing Street residence after an emergency cabinet meeting on Wednesday, May said Britain's alert level would remain unchanged at level four, or "severe".
The prime minister was in parliament at the time of the attack and was ushered away in a silver car as gunfire rang out.
Foreign Office minister Tobias Ellwood, whose brother Jonathan was killed in the 2002 Bali bombing, was pictured with his face smeared with blood helping to give first aid to the fatally wounded police officer.
Queen Elizabeth II postponed her appearance on Thursday to open the new headquarters of London's Metropolitan Police and London's mayor Sadiq Khan called a candlelit vigil on Trafalgar Square later in the day.
Britain's allies vowed to stand with London in the fight against terror while lights on the Eiffel Tower in Paris were switched off at midnight in solidarity with the victims.
US President Donald Trump and French President Francois Hollande both spoke to May and Chancellor Angela Merkel said Germany stood with Britons "against all forms of terrorism".
Britain's last terror attack was last year's assassination of MP Jo Cox by a pro-Nazi sympathiser in her constituency in northern England shortly before the vote to leave the European Union.
Several international tourists visiting one of London's most iconic sights were caught up in the violence.
French Foreign Minister Jean-Marc Ayrault travelled to London to visit three French pupils on a school trip who were among those hurt.
Five South Korean tourists were wounded, Seoul's foreign ministry said, while the Romanian government said two of its citizens were also injured.
A Portuguese man was hurt, the country's government said, while a seriously injured woman was rescued from the River Thames following the incident.
A Chinese tourist was also slightly injured.