The pair are alleged to have been plotting a suicide attack in Iraq.

One of the men, said to be a veteran of militant training camps in Afghanistan, also allegedly tried to obtain uranium.

Police arrested Ibrahim Mohamed K, a 29-year-old Iraqi living in Mainz, on suspicion of recruiting suicide attackers in Germany.

Also arrested was a 31-year-old Palestinian of Libyan origin but bearing an Egyptian passport.

Yasser Abu S, a Bonn medical student, is believed to have been recruited by Mohamed K in September to carry out a suicide mission in Iraq.

Police had been keeping the two suspects under surveillance since October.

According to Germany’s chief federal prosecutor, Kay Nehm, the two men planned to fake the death of Yasser Abu S and use his €800,000 ($AUD 1.36 million) life insurance payout to fund an attack on Iraqi soil.

Ibrahim Mohamed K was said to have “a not unimportant role in al-Qaeda, because he showed signs of contact with Osama bin Laden and met with Ramzi Bin al-Shaibah”, one of the September 11, 2001, hijack plotters now held in US custody.

Mr Nehm said Mohamed K had trained in Afghanistan multiple times prior to the September 11 attacks in the US, and returned to Afghanistan’s camps for more than a year afterwards.

During this time, he was apparently convinced to give up his idea of becoming a suicide attacker to instead recruit others and coordinate activities from Europe.

Mohamed K was alleged to have sought nuclear material for use in an attack and had been in contact with a group in Luxembourg possessing 48 grams of uranium, but was said to be unsuitable for a bomb.

Police raided four homes in Mainz and Bonn as part of the arrests.

However, Mr Nehm advised that “there was no independent cell in Germany and no suicide attacks planned in Germany,” dispelling speculation that a forthcoming visit by US President George W Bush to Mainz on February 23 was a possible target of attack.

Germany has been intent on rooting out extremist suspects after much of the planning for the September 11 attacks was traced back to a cell in Hamburg.

On January 12, police placed 22 suspects in custody during a nationwide sting which found a network of Muslim militants in possession of forged passports and propaganda material.

While in December, three suspected members of the Ansar al-Islam group were arrested for allegedly planning to attack Iraq’s interim Prime Minister Iyad Allawi during a visit to Berlin.

From January 1, new German laws have come into force allowing authorities to deport suspected foreign militants from the country.

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