(Adds names of suspects, Bush spokesman, background)

By Noah Barkin and Sabine Siebold

BERLIN, Sept 5 (Reuters) - German security services foiled a plan by Islamist militants to carry out "massive bomb attacks" against U.S. installations in Germany and arrested three suspects, officials said on Wednesday.

Federal prosecutor Monika Harms said the men, two German nationals and one Turk, had been on the verge of launching their attacks after acquiring enough material to make a bomb with explosive power equal to 550 kilograms of TNT.

The men were arrested on Tuesday, the same day Danish police seized eight young Muslims they suspect of plotting a bomb attack and a week before the sixth anniversary of the Sept. 11, 2001 hijacked plane attacks on targets in the United States.

"Thanks to the cooperation of federal and local police over several months, we were able to ... prevent massive bomb attacks," Harms told a news conference in Karlsruhe.

German Defence Minister Franz Josef Jung said the suspects posed an "imminent" security threat, while Chancellor Angela Merkel said a "horrible event" had been averted.

"It shows that the terrorist threat here isn't abstract. It's real," she said at a news conference in Berlin with visiting Lebanese Prime Minister Fouad Siniora.

Officials could not confirm reports the suspects had been targeting Frankfurt international airport and a U.S. military base in Ramstein, but said they had scouted out sites frequented by Americans including discos, bars and airports.

Prosecutors identified the three men as 28-year-olds Fritz G. and Adem Y., and 21-year-old Daniel S.

"The apparent motive is hatred of Americans," said Joerg Ziercke, head of the federal police. He added that the explosives could have caused more damage than the bombings in Madrid and London which killed 191 and 52 people.

AL QAEDA

The men belonged to a little-known al Qaeda-affiliated Sunni Muslim group with roots in Uzbekistan called "Islamic Jihad Union", officials said. All three are believed to have trained in Pakistan militant camps.

It was unclear whether there was any link between the alleged German and Danish plots, official said.

Germany refused to take part in the U.S.-led Iraq war but it has some 3,000 troops stationed in Afghanistan and has been on high alert for attacks.

The country has feared a re-emergence of militant Islamist groups since 2001, when the northern city of Hamburg was used as a base for planning the Sept. 11 attacks.

In April the U.S. embassy in Berlin announced it was strengthening security at diplomatic and military facilities in Germany in response to an increased threat of terrorism.

Ziercke said the men had been seized at a rented holiday house in the Sauerland region of western Germany.

Between February and August 2007, he said, the suspects had filled 12 large vats with 730 kg (1,600 lb) of a solution containing hydrogen peroxide -- the explosive chemical used in the 2005 suicide bombings in London.

"This amount would have been enough to cause damage on a greater scale than in London and Madrid," Ziercke said, adding that the suspects had probably been planning simultaneous car bomb attacks in several locations across Germany.

SHOT FIRED

Some 300 police had tracked the suspects since December, when one of them was observed scouting out U.S. military barracks in the German city of Hanau, near Frankfurt.

The police swooped on Tuesday, raiding the house and some 40 other sites across Germany after local police unwittingly stopped the suspects for a routine traffic violation several days ago and they grew nervous, Ziercke said.

One suspect escaped out of a bathroom window but was detained after a scuffle with police in which a shot was fired.

Police said additional arrests were possible. The interior ministry of the southwestern state of Saarland said five further suspects were being investigated.

A White House spokesman said U.S. President George W. Bush, in Sydney, Australia, had been briefed on the arrests.

"He's pleased a potential attack was thwarted and appreciates the work of the German authorities and the cooperation by international law enforcement," he said.

Germany has not seen a major attack for several years. But two men of Lebanese origin tried to detonate crude bombs hidden in suitcases on trains last year.

"We are under threat," Interior Minister Wolfgang Schaeuble told a news conference in Berlin. "We have to remain vigilant." (Additional reporting by Hendrik Sackmann in Karlsruhe and Erik Kirschbaum, Louis Charbonneau, Catherine Bosley and Sylvia Westall in Berlin)

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