The Royal Canadian Mounted Police said they arrested 12 male adults and five youth and foiled plans for terrorist attacks against targets in southern Ontario.
The FBI tells CBS News, "There is preliminary indication that some of the Canadian subjects may have had limited contact with the two people recently arrested from Georgia."
The FBI arrested a 21-year-old Georgia Tech student and another man who they say traveled to Canada to to discuss "strategic locations in the United States suitable for a terrorist strike," according to an affidavit released in April.
A Department of Homeland Security spokesman tells CBS News correspondent Bob Orr, "There are NO plans to adjust our security posture at the Northern border. This appears to be a domestic Canadian incident."
But CBS News terrorism analyst Michael Scheuer does not think of this as an isolated threat. "The borders are wide open between Canada and the United States, and it's very easy to communicate across those borders," he said.
Canadian police told reporters the group recruited angry young Muslims and maintained an al Qaeda-style training camp north of Toronto.
Officials showed evidence of bomb making materials, a computer hard drive, camouflage uniforms and what appears to be a door with bullet holes in it at a news conference Saturday morning.
"This group took steps to acquire three tons of ammonium nitrate and other components necessary to create explosive devices," said assistant Royal Canadian Mounted Police commissioner Mike McDonell said.
McDonell said that is three times the amount used to blow up the Murrah Federal Building in Oklahoma City.
"I suspect it does not mean that there is sophisticated planning," Scheuer says. "Ammonium nitrate is a readily available explosive. It's a very rudimentary terrorist weapon but a very powerful one."
The arrests were made Friday, with some 400 officers involved.
McDonell said the suspects were either Canadian citizens or residents of Canada and had trained together.
Heavily armed police officers surrounded the Durham Regional Police Station in the city of Pickering, as the suspects were brought into the station in unmarked cars late Friday night.
The Toronto Star reported Saturday that young men in their teens and 20s, upset at the treatment of Muslims worldwide, were among those arrested.
The newspaper said they had trained at a camp north of Toronto and had plotted to attack CSIS's downtown office near the CN Tower, among other targets.
Melisa Leclerc, a spokeswoman for the federal Public Safety Minister Stockwell Day, had no comment on the arrests.
In March 2004, Ottawa software developer Mohammad Momin Khawaja became the first Canadian charged under the country's Anti-Terrorism Act for alleged activities in Ottawa and London. Khawaja was also named, but not charged, in British for playing a role in a foiled bomb plot. He is being held in an Ottawa detention center, awaiting trial.