UPDATE: Police have stepped up their investigation into the discovery of the volatile homemade explosive TATP in the South West.
Police this afternoon located a suspicious package in a disused caravan park in Peppermint Grove Beach near Capel.
A man was arrested after the Tactical Response Group raided a house in Bunbury this morning as part of the police operation known as Operation Backboard.
Deputy Commissioner Chris Dawson said a major police operation was continuing in Bunbury, Picton and Capel.
He said no charges had been laid against the man in custody.
Bomb Squad technicians were at Peppermint Grove Beach caravan park this evening working to make the area safe, a police spokesperson said.
"By now, local community members will be well aware of the increased police presence in the South West and we ask that they continue to be patient and abide by any police instructions," the spokesperson said.
"Officers will be talking to local residents in the Peppermint Grove Beach area and some may be required to temporarily evacuate as a safety precaution.
"Roadblocks have been established on Peppermint Grove Road and Hardey Terrace and we ask for the public's co-operation.
"Community safety is our priority."
Police blocked off the road leading to Peppermint Grove Beach this afternoon.
Only local residents were allowed access to the road as officers continued their investigation.
"We have no reason to believe at this point there are any matters that will cause any immediate (risks) to the safety of the public, but we are broadening our search and that’s because we need to be thorough," Deputy Commissioner Dawson said.
The closure of the road at Peppermint Grove Beach follows a police raid of a Bunbury house this morning.
Police smashed windows in the raid on the house about 4am while executing a search warrant.
A neighbour said she was woken by banging and crashing about 3.30am.
She said she could hear a woman crying after police burst into the home.
It is believed the home is rented to a woman in her mid-20s and her young daughter.
A man is being questioned over the chemical explosives found in the South West last week in what is believed to be the first breakthrough in the bomb mystery.
Neighbours said they did not know who the man was.
Police also searched an Australind estuary and a Picton business on Harris Road after they raided the Bunbury house today.
The Picton business is believed to be the workplace of the man in custody.
"Roadblocks are in place at the Moore Street residential property in Bunbury and an industrial facility in Harris Road, Picton," police said.
"There are police guards at these two locations but they are not considered unsafe. They are declared ‘protected forensic areas’ at this time."
Police and Navy clearance divers searched four jetties on the Leschenault estuary today but no suspicious items were found.
Divers will continue to search the estuary tomorrow.
It is believed today's arrest is the first breakthrough in the search for those responsible for the explosives, which were found in packages during two separate searches of the Leschenault Estuary last week.
Police have appealed several times for help to catch those who made the dangerous chemical compound, which is popular with terrorists.
Last Tuesday, a member of the public discovered about 3kg of TATP hidden underwater near a jetty at Leschanault Estuary, Australind.
A second package was found at the same site 36 hours later.
Both packages were destroyed in controlled detonations.
It is the biggest amount of TATP - also known as "Mother of Satan" - found in Australia and the same explosives used in the 2005 London bombings.
It is created through the chemical reaction between hydrogen peroxide and acetone, is highly volatile, and particularly susceptible to heat, friction and shock.
The find sparked a review of security at an international conference in Perth and of critical infrastructure.
Police said Operation Backboard was a major police investigation and the public would be kept informed about developments.
"Information from the public has been critical to this inquiry and we ask that anyone with any further information that may assist police to please contact Crime Stoppers 1800 333 000," police said.