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 The helicopter crashed just south of the River Thames near the Underground and mainline train station at Vauxhall, and near the British spy agency MI6.
Police said one person had critical injuries. Several people were taken to a nearby hospital with "minor injuries," London Ambulance Service said.
The pilot, who was killed, had requested to divert and land at the nearby London Heliport.
"We received a request from Heathrow air traffic control to accept the helicopter, which had asked to be diverted due to bad weather," the heliport said in a statement.
"The London Heliport never gained contact with the helicopter," the statement added.
The Ministry of Defense said it was not a military helicopter, and a British security official who spoke on condition of anonymity because he wasn't authorized to speak to the press said the incident was not terror-related.
The horrific scene unfolded at the height of the morning commute when thousands of pedestrians were trying to get to work. The weather at the time was overcast and misty with fog and poor visibility, according to the weather forecasting service, the Met Office.
Video on Sky News showed wreckage burning in a street, and black smoke in the area. The video from the crash scene showed a line of flaming fuel and debris. Witnesses said the helicopter hit a crane atop a 50-story residential building, the St. George Wharf Tower.
"I was 100 percent sure it was a terrorist attack," said Allen Crosbie, site manager for the landscape firm Maylim Ltd., who was working at the scene.
"There was debris everywhere, a ton of black smoke. Parts of the crane, parts of the helicopter. I heard bang, bang
-- I presume it was the helicopter hitting the crane and then the ground. People were just panicking."
William Belsey, 25, a landscape worker, also said he heard the helicopter hit the crane.
"Luckily the crane operator was late for work this morning. He picked a good day to be late," Belsey said.
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 Police Commander Neil Basu said one of the dead was the pilot of the commercial helicopter, which had been flying from Redhill, south of London. No one else was thought to be aboard, Basu said; the other fatality was a person on the ground.
British aviation authorities had issued a "notice to airmen" warning pilots about the crane, which extended to 770 feet (235 meters) above ground. The crane is lit at night, and police said investigators would look at whether the light was faulty.
The area, roughly 10 blocks from the major Waterloo train and Underground station, is extremely congested during the morning rush hour. Many commuters arrive at the main line stations from London's southern suburbs and transfer to buses or trains there.
Aviation expert Chris Yates said that weather may have played a role. Investigators also would look at whether the crane had navigation lights.
"The question then becomes whether the pilot was fit," Yates said.
[Associated
Press; By CASSANDRA VINOGRAD]
Associated Press writer Robert Barr contributed to this report.
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