The three suspects, two German converts to Islam and a Turk, are believed by criminal investigators to have undergone training with a Sunni Muslim terrorist group in Pakistan, subsequently forming a German cell.
The group, named as Islamic Jihad Union by Federal Prosecutor Monika Harms, is an offshoot of the Islamic Movement of Uzbekistan.
Harms said that the "al-Qaeda inspired" group had enough hydrogen peroxide to produce a bomb with the explosive equivalent of 550 kilograms (1,200 pounds) of TNT.
"That would have enabled them to make bombs with more explosive power than the ones used in the London and Madrid bombings," Joerg Ziercke, the head of Germany's federal crime office, said. "The apparent motive was hatred of Americans."
The group had been under surveillance by police since December 2006, and the decision to arrest them was taken after they were observed moving the explosive materials from a rented garage in the Black Forest to a rented holiday flat in the Northern Rhine region.
According to German officials, the trio had planned to carry out attacks on discotheques, parks, restaurants, and airports used by Americans. They said the bombings were due to start "within days."
"We were able to succeed in recognizing and preventing the most serious and massive bombings," Harms told reporters.
German soldiers are based in Afghanistan, but they have not been sent to Iraq. Although the terrorist cell responsible for the 9/11 attacks on New York and Washington was based in Hamburg, Germany has so far avoided the kind of large-scale attacks by Islamist terrorists seen elsewhere in Europe.
