(CBS) The Bush administration Tuesday raised the nation's terror threat level to orange – or "high" – saying the recent bombings of residential compounds in Saudi Arabia may be a prelude to a domestic strike.

"When we see a pattern of activity overseas directed at United States targets we certainly have to be aware that there remains that potential of use of those type of tactics here in the United States," Homeland Security Undersecretary Asa Hutchinson told reporters.

Hutchinson said Homeland Security Secretary Tom Ridge spoke with governors and mayors and asked them to deploy more police and review security measures.

The decision to raise the terror alert level was made during a White House meeting of President Bush's homeland security council, said Bush spokesman Ari Fleischer.

CBS News Correspondent David Martin reports officials think an attack could be very imminent. That's based on intelligence consisting primarily of intercepted conversations of known al Qaeda operatives talking among themselves about something that is going to happen in the next two or three days, in some cases mentioning specific parts of the country.

There is always a time lag between when a conversation is intercepted and when it actually gets translated and analyzed, so that two- or three-day period these al Qaeda operatives are talking about may already have begun.

It's impossible to know if this talk is wishful thinking, deliberate disinformation or the real thing, reports Martin, but it's also impossible to ignore since it's exactly the kind of talk that preceded 9/11.

Jamie Metzl, coordinator for Homeland Security Programs for the Council on Foreign Relations, says the increased security level is a response to the bombings in Saudi Arabia.

"Certainly, the recent bombings are important," he said, "and it shows that, even though the administration was sounding triumphal notes a few weeks ago, global terrorism remains a significant threat to the United States.

"If anybody was resting momentarily that we gained the upper hand against terrorists, they’re mistaken."

State and local authorities began reacting after Tuesday's announcement. Police in California began working 12-hour shifts. National Guard troops in New York were called up to protect subways and bridges. In Washington, the Capitol police SWAT team prepared to conduct random patrols.

Federal law-enforcement officials said that among the intelligence picked up recently were two electronic transmissions that discussed the possibility of an attack on New York, Washington, Boston and more broadly the U.S. coastlines. The officials, speaking on condition of anonymity, said there were doubts about the credibility of the threats and stressed that they were not the driving factors in the decision to raise the threat level.

But in Washington, the level of worry is as high as it's been since Sept. 11, reports CBS News Correspondent Bob Orr.

For the second time in five days, the FBI Tuesday fired off a terror alert to 17,000 police departments, warning that although there's "no information about a specific threat in the United States, recipients should be alert to potential operations in this country."

While al Qaeda has preferred large simultaneous attacks, like 9/11 and the African embassy bombings in 1998, the smaller-scale multiple-car bombings in Saudi Arabia may signal a new style of al Qaeda terror.

"This rolling attack is perhaps new, but I think it's part of the effort for al Qaeda to say, 'We're back. We have not gone away,'" says CBS News homeland security consultant Randall Larsen.

Orange is the second-highest level on the five-color terror alert scale; the previous level, yellow, marked an "elevated" risk. It's the fourth time in just over eight months the threat level has been raised. Each time, the level was lowered back to yellow after a few weeks.

During the alerts, no domestic attacks were apparently attempted, leading some to question whether the orange alerts do anything more than frighten the public and cost taxpayer dollars, particularly in parts of the country where terrorist attacks are unlikely.

However, homeland security officials say heightened security can stop attacks without authorities realizing it — a would-be terrorist may pass on striking a target when he sees the extra guards.

The latest Code Orange was lifted at the end of the Iraq war after retaliatory attacks failed to materialize.

Now, cities like New York are once again increasing patrols around landmarks, transportation systems and ports. The FBI's latest bulletin urges state and local authorities to watch for would-be terrorists and to "be alert to potential preoperational planning such as surveillance and acquisition of explosive materials."

The move to Code Orange will be expensive. During the Iraq war, state and local governments paid nearly $2 billion, mostly for overtime. But homeland officials say the threat is real enough to merit the cost.

Meanwhile, counterterrorism police in Saudi Arabia reported Tuesday they had arrested three al-Qaeda suspects in the country's commercial capital, the Red Sea port of Jeddah. One of the three is said to be talking to interrogators.

CBS News Correspondent Tom Fenton reports the Saudis themselves say this is just the tip of a terrorist iceberg.

One Saudi official said there may be as many as 50 Muslim militants in the kingdom ready to volunteer for suicide attacks. They are believed to belong to three terrorist cells, including the one that carried out the suicide bombings that killed 34 people in Riyadh last week.

The government has stepped up security measures, but the foreign minister warned Tuesday there is no guarantee that it can prevent further attacks.

American officials are taking no chances. They announced the embassy in Riyadh and the consulates in Dahran and Jeddah will be closed for at least the next four days.

The embassy says the closure is based on credible information that further strikes are being planned and may be imminent.