Richelle Keepman, a passenger aboard the plane, said she first noticed a disturbance in the cabin when she heard screams.
"We were in the back of the plane and we heard some screams and some flight attendants ran up and down the aisles," she said.
"I think we knew at the point when we saw the fear in the flight attendants' eyes and they grabbed the fire extinguishers."
Al Jazeera's John Terrett, reporting from Washington, said Abdulmutallab has been taken into US custody.
"[He] says he has links to al-Qaeda and he says that he got the equipment that he allegedly used as the flight was approaching Detroit from contacts in Yemen," Terrett said.
US media, citing anonymous officials, reported that Abdulmutallab had admitted to having explosive powder taped to his leg that he sought to ignite by using a syringe filled with chemicals.
In Nigeria, the government confirmed the suspect was one of their own and said Nigerian authorities had launched an investigation.
British police were also searching a number of buildings in London as part of the investigation following unconfirmed reports that Abdulmutallab was a student at the University College London.
"We are in liaison with the US authorities and searches in London are being conducted as part of ongoing enquiries," the Reuters news agency quoted a spokeswoman for the Metropolitan Police as saying.
"The searches are being carried out at more than one address," she said, declining to give further details.
In the US, homeland security offcials said enhanced security measures had been put into effect after the failed attack.
"Passengers may notice additional screening measures put into place to ensure
the safety of the travelling public on domestic and international flights," it said in a statement.
Barack Obama, the US president who is currently on holiday in Hawaii, was "actively monitoring" the situation, a White House spokesman said.
"The president was notified of the incident this morning between 9am (07:00 GMT) and 9.30am Hawaii time by the president's military aide," Bill Burton said in a statement.
After Obama was informed of the incident he held a secure conference call with John Brennan, his homeland security and counterterrorism adviser, and Denis McDonough, the National Security Council chief of staff .
"[Obama] asked to arrange a subsequent secure call and... instructed that all appropriate measures be taken to increase security for air travel," the White House said.