Gardai are satisfied they have smashed a dissident republican 'engineering' unit after discovering a bomb factory in Co Kildare yesterday.
Five men were under arrest last night, including two who are suspected of being key members of a unit supplying homemade bombs to the breakaway terror group styling itself 'Oglaigh na hEireann'.
The arrests were described by a senior anti-terrorist officer as "highly significant".
The bomb factory was found on a farm outside Monasterevin. Further searches were being launched at first light today.
The bomb factory had been set up inside two containers on a rented farmyard in the townland of Quinnsboro, a couple of miles outside the town.
Gardai found a number of mortar tubes and components for nine mortars. They believe the factory had been in use for several months, carrying out the initial phase of manufacturing mortars for use against security-force targets in Northern Ireland.
Officers believe the dissidents were then transferring the partly made mortars to another factory which was uncovered by gardai in a shed at Dromiskin, Co Louth, last month.
The mortars were then packed with explosive and readied for use at Dromiskin, before being transferred across the Border for a terrorist attack.
Security analysts told the Irish Independent after Christmas that they were concerned that the dissidents were honing their bomb-making skills and were now posing a potentially serious terrorist threat.
Yesterday's raid was part of Operation Designer, which was set up two years ago to crack down on terrorist activity on this side of the Border.
Oglaigh na hEireann, a former faction of the Real IRA, is regarded as the most dangerous of the three main dissident groups and is one of the prime targets for Designer.
Two suspects were arrested close to the scene of yesterday's find and a third man, from Monasterevin, was detained shortly afterwards.
In follow-up searches, heavily armed officers arrested two others from Tullamore, Co Offaly. Gardai said none of the five had been involved in the past with the Provisionals and had only come to their notice in recent months.