Armed police were called to a house in Haresfinch after a man approached a uniformed officer brandishing a knife.
Officers were dispatched to a property on Litherland Crescent to remove a car which was suspected to be parked illegally in the area.
However, it is believed an argument broke up during which a knife was pulled.
Other officers were called to the scene.
A police spokesman said: “The area was contained by armed officers to ensure safety of the public.”
Two men have been arrested for public order offences.