A bonded delivery van carrying a quantity of cigarettes was hijacked at gunpoint by a number of masked and armed men shortly before 10am.

The driver of the van was approached at a garage on the Letterkenny Road by three men, one of whom was carrying a handgun. The driver was then stuck on the head with the gun before the masked raiders made off with the van.

It was later found abandoned in a laneway linking Limewood Street and Tyrconnell Street. Eyewitnesses said they saw several men wearing masks get out of the van in the laneway before getting into a waiting car and driving off.

The laneway was sealed off by the police and Army Technical Officers were called to the scene.

Residents of Limewood Street, Tyrconnell Street and Elmwod Terrace have been asked to leave their homes during the security alert.

A PSNI spokesperson said the area is likely to be sealed off for some time and warned motorists about possible traffic disruption.

Detectives investigating the incident are keen to hear from anyone who noticed the three men at the garage before 10am or saw the white Mercedes Sprinter van being driven away or abandoned.

The number to call with any information is 0845 600 8000, or the Crimestoppers charity anonymously on the freephone number 0800 555 111.

Sinn Féin councillor for the area Patricia Logue has called for an urgent review of crime-fighting strategies on both sides of the border to tackle the growing number of armed robberies.

The incident follows an armed robbery at Elmwood Stores on Tuesday morning during which the shopkeeper was held up at gunpoint and a spate of armed robberies on both sides of the Derry/Donegal border in recent weeks.