I think the incident involving the killing of a WPC (Yvonne Fletcher) which you are referring to was something that happened near the Libyan Embassy a few years later. The gunshot was thought to have come from the embassy but the police couldn’t do anything about it because of diplomatic privileges (the Libyans refused to let the police interview or arrest anyone in the Embassy).
In the 1980 Iranian Embassy siege, the SAS went in after they started murdering the embassy staff. Every last terrorist but one was shot dead, and the lone survivor only survived because by the time he was discovered, he was already outside with the rescued hostages under the glare of the world’s cameras.
Ironically, the terrorists were opposed to the Iranian Revolution and had been sponsored by Saddam Hussein, who was supposed to be the West’s bestest friend at that time....
I forgot about the Libyan connection. In any event, you don’t want to get the SAS on your bad side. “Who Dares, Wins.”