The arrests are believed to be the first of their kind in the small North Island nation.
Police said at a news conference that several semi-automatic weapons, including those created with a 3D printer, were seized at nine different locations, as well as “thousands” of rounds of ammunition.
“Police operations carried out yesterday … were related to an investigation into preparations for a terrorist attack,” Iceland’s national police commissioner, Karl Steinar Valsson, told reporters.
Four young Icelanders were arrested in the capital’s Reykjavik suburb of Koupavogur and the southwestern city of Mosfelsbair on Wednesday in a large-scale operation involving about 50 officers, police said. Two of them were remanded in custody on Thursday.
Although the possible motives were not known, KSValsson indicated that the targets could have been “citizens of the state” and “various public institutions” – for example, the parliament and the police themselves.
In addition, it is being investigated whether the detainees had ties to extremist organizations, officials said.