Mohamed Osman Mohamud is accused of attempting to blow up a van during a Christmas tree-lighting ceremony, but FBI agents had infiltrated the plot in its early stages and supplied Mohamud with fake explosives.
"We were able to thwart somebody who clearly had the intention by his own words and by his actions to harm a great many people, to do real serious damage to property, to put at risk the lives of American citizens - including children," Holder said, adding that if Mohamud hadn't come in contact with the FBI, he "would have made his plans tragically real."
A federal grand jury indicted Mohumud, 19, Monday on charges of attempted use of a weapon of mass destruction. He entered a not guilty plea later in the day in federal court in Portland.
Meanwhile, patrols around mosques and other Islamic sites in Portland have been stepped up as Muslim leaders expressed fears of retribution.
Portland Mayor Sam Adams said Sunday that he beefed up protection around mosques "and other facilities that might be vulnerable to knuckle-headed retribution" after hearing of the bomb plot.
The move followed aat the Islamic center in Corvallis, a college town about 75 miles southwest of Portland, where Mohamud occasionally worshipped, prompting an FBI arson investigation and concern about the potential for more retaliation.
CBS News correspondent Ben Tracy reports the 18-month FBI sting operation tracked Mohamud as he planned the attack and purchased what he thought were bomb-making materials from undercover federal agents.
The FBI even oversaw what Mohamud thought was a practice run -allowing him to blow up a backpack full of real explosives in a remote location, says Tracy. He planned last Friday's attempt for maximum impact, bragging to undercover agents, "it's gonna be a fireworks show... the New York Times will give it two thumbs up."
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Mohamud's attorney, Stephen R. Sady, who has represented terrorism suspects held at the U.S. prison at Guantanamo Bay, didn't return a telephone message left Sunday by The Associated Press.
The suspect's mother, Maryan Hassan, declined to discuss the issue when contacted by phone late Sunday by the AP, referring all questions to Sady. His father also refused to comment.
Somali leaders in Oregon - a state that has been largely accepting of Muslims - gathered with Portland city leaders Sunday evening to denounce violence and call for help for at-risk Somali youth.
"We left Somalia because of war, and we would like to live in peace as part of the American community," said Kayse Jama, executive director of a local organization founded after the 9/11 attacks to fight anti-Muslim sentiment. "We are Portlanders. We are Oregonians. We are Americans, and we would like to be treated that way. We are your co-workers, your neighbors."