Armed police descended on Bowling just before 10pm on Saturday.
The force said the group could be seen in the vicinity of Parkside Road, West Bowling, in two vehicles.
Five men, aged between 17 and 23, were arrested on suspicion of affray in connection with the incident.
All five were later released on police bail pending further enquiries.
Armed police and a number of force vehicles flooded onto Brassey Road, East Bowling, on Saturday evening.
The officers focused on the residential area while police cars blocked access on part of the street.
One officer could be seen with a dog at the scene while others worked further up the street along New Hey Road.
The sight of the “visible armed police presence” had “understandably caused concern for local residents”, a councillor for the area told the Telegraph & Argus on Sunday.
Councillor Rizwana Jamil (Labour, Bowling and Barkerend) urged residents to work with police and assist them in their investigation.
She thanked locals for their “patience and cooperation”.
Cllr Jamil told the T&A on Sunday: “I am aware that there was a visible armed police presence in East Bowling which has understandably caused concern for local residents.
“Whilst details are limited at this moment in time, I am in contact with the police and will continue to seek updates on behalf of the local community.”
Full statement from West Yorkshire Police
“At 9.51pm on Saturday, police received a report of a group of males armed with knives seen in the vicinity of Parkside Road, West Bowling, in two vehicles.
“Armed officers were deployed to carry out a search of the area and five males, aged 17 to 23, were subsequently arrested on suspicion of affray in connection with the incident.
“They were later released on police bail pending further enquiries.”