Police arrested two men, aged 27 and 48, on Wednesday, March 17, after a report that windows had been damaged at a property in Prince Edward Road in South Shields on Sunday.
Officers say they now believe that the damage was likely to have been caused by a firearm, but have confirmed nobody was injured in the incident.
A cordon was put in place on a stretch of the busy road on Monday, March 15, and investigations have been ongoing to identify those responsible.
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Police said the men have been arrested on suspicion of possessing a firearm with the intent to cause fear.
Neighbours had previously reported hearing a loud bang in the early hours of Sunday, which they thought was a delivery van unloading at the Nook shopping area over the road.
A Northumbria Police spokesperson said: “At 11.45am on Sunday we received a report that windows had been damaged at a property on Prince Edward Road in South Shields.
“Officers attended the scene and enquiries were carried out to establish the circumstances around the incident.
“It is now believed that the damage was likely to have been caused by a firearm. Nobody was injured but an investigation has been ongoing over the last few days to identify those responsible.
“Yesterday (Wednesday), two men – aged 27 and 48 – were arrested on suspicion of possessing a firearm with the intent to cause fear. They remain in police custody at this time. All parties involved are believed to be known to each other."
Police could be seen in the Nook and Harton area throughout Thursday, March 18.
Northumbria Police confirmed officers were carrying out searches at a number of addresses in the area.
A police vehicle could be seen parked in Kirkley Avenue, where police said one of the searches was being carried out.
:: Officers are asking anyone with information to contact them via their website or by calling 101 quoting log 387 140321.