Armed police with sniffer dogs are said to be at two separate locations in Rosyth.
Eyewitnesses reported numerous police with weapons, along with dogs at the Hillpark Hotel in Heath Road.
Police Scotland confirmed a man had been arrested.
They said there was no threat to the wider community.
‘All kicking off’
A spokesman for Police Scotland said: “Police attended at an address in Heath Road, Dunfermline around 6.10pm on Friday, September 3, in connection with enquiries into an ongoing investigation.
“One man has been arrested.
“There is no threat to the wider community.”
Meanwhile, others claimed it was “all kicking off ” in the Fife town’s Nelson Street.
Search behind building
One eyewitness said: “Five police vehicles showed up at the Hillpark Hotel in Rosyth shortly after 8pm on Friday night.
“There were a number of armed officers who seemed to be searching an area behind the building.
“Staff at the nearby Rosyth Fish Bar said they had seen armed officers and police dogs going behind the hotel.”
It is understood the two incidents were connected.
Armed police at Rosyth hotel incident as man arrested