The man was being grilled by homicide detectives on Tuesday night after being taken into custody following reports of a dispute at a home on Cohuna Street in Broadmeadows on Monday night.

He is understood to be one of a group of men who faced court eight years ago on terrorism charges. He was acquitted while others were found guilty of being part of a terrorist organisation.

Homicide squad detectives are investigating links between the children's missing mother and the discovery of an unidentified woman's body in nearby Dallas on June 17.

Last week, homicide squad Detective Inspector Mick Hughes said the woman had not been identified, but may have been killed during a family violence incident and dumped in the Dallas Tennis Centre car park.

The car park is less than three kilometres from the Broadmeadows house searched by police on Tuesday.

Police were called to the home just after 10pm on Monday and found one toddler and two primary school-aged children injured. They were taken to the Royal Children's Hospital with non life-threatening injuries.

The man, who is known to the children, was arrested at the scene and remains in custody. No charges have been laid. Police have not confirmed if they know the whereabouts of the children's mother.

One neighbour said the mother had not been seen for a month, while another said she had not been seen for at least two weeks.

Police released computer-generated images of the woman found dead in Dallas, as well as a photo of a distinctive brown headscarf found with the body.

A woman living on Cohuna Street said she often heard yelling in the house. "The man had a loud voice," she said. "Even when he said 'hello', you could hear it. "We spoke to the children across the fence."

Another neighbour said she had seen a woman in a headscarf gardening at the Cohuna Street property but when she had tried to speak to her a man told her to go inside.

However, another neighbour said the image released by police did not look like the missing mother.

Forensic police were still at the brick veneer house late on Tuesday night and the street is closed off to traffic.

Earlier on Tuesday, police were photographed carrying shovels onto the property.

The case took a strange turn on Tuesday morning when a masked man drove up to the cordoned off scene, but sped off after seeing police, mounting a curb as he left. A police car gave chase shortly afterwards.

Police were seen interviewing witnesses after the driver almost crashed into parked cars as he fled.