Six people have been arrested after firearms, drugs, £100,000 in cash and cigarettes were seized by the PSNI on Sunday.
Four men and two women were detained following a series of searches of vehicles and addresses in south Armagh and Markethill.
The operation took place after a vehicle was spotted acting suspiciously in Newry.
PSNI commander for Newry, Mourne & Down, Superintendent Norman Haslett, said: "At around 1.30pm on Sunday afternoon, the police helicopter observed a suspicious vehicle, a white BMW X5, in the Newry area and followed it to Camlough where officers on the ground were tasked to intercept it.
"At Camlough, the occupants of the BMW were observed to carry out a suspected drug deal with the driver of a blue Renault Megane before both vehicles left the area.
"The Megane made its way to an address in Bessbrook and the BMW drove towards Markethill. Both vehicles were subsequently intercepted with the occupants of the cars arrested.
"Searches were conducted at a number of locations, including the house in Bessbrook, with further arrests being made there.
"Suspected diazepam, cannabis and ecstasy were recovered along with £100,000 in cash, suspected firearms and quantities of tobacco and cigarettes.
"Two women aged 31 and 59, and four men aged 28, 30, 41 and 45 currently remain in custody assisting officers with their enquiries.”
Superintendent Haslett continued: “This is a great example of proactive policing involving our Air Support Unit, District officers and Tactical Support officers and shows our continued determination to target the supply and use of illegal drugs."