Homes and businesses across England are being searched and 24 people questioned after police say a plot to blow up UK flights to the US was disrupted.
Police are convinced they have detained the key players, but believe the network involved is large and global.
US intelligence officials believe the plotters hoped to stage a practice run followed by actual attacks on up to 10 planes within days.
UK police said they could have caused "mass murder on an unimaginable scale".
Security chiefs said the group believed to be planning the attack had been under surveillance for some time.
US Homeland Security Secretary Michael Chertoff said the plot was "in some respects suggestive of al-Qaeda".
"They had accumulated and assembled the capabilities that they needed and they were in the final stages of planning for execution," he said.
It had only become apparent in the "last two weeks" that the target of the flights was the US, said Mr Chertoff.
American broadcaster ABC News reported that five more suspects still at large in Britain were being "urgently sought", citing US sources briefed on the plot.
British police declined to comment on the report.
According to US officials, the plan was to take liquid explosives on up to 10 planes with detonators hidden in electronic devices.
They said the airlines to be targeted were United, American and Continental, bound for New York, Washington and California.
At UK airports on Thursday - with the country on its highest terror alert of "critical" - bottles of water were taken from passengers and mothers asked to taste their babies' milk before it could be taken on to flights.
Peter Clarke, the head of Scotland Yard's anti-terrorist branch, said the surveillance involved in disrupting the plot had been "unprecedented" and had involved police forces in the UK and internationally.
Sources told the BBC the "principal characters" suspected of being involved in the plot were British-born, some with links to Pakistan.
A senior Pakistani security official told the AFP news agency that Pakistani intelligence agencies helped British authorities foil the plot.
Foreign ministry spokeswoman Tasnim Aslam said: "Pakistan played a very important role in uncovering and breaking this international terrorist network.
"There were some arrests in Pakistan which were co-ordinated with arrests in the UK."
The suspects were rounded up in raids in London, High Wycombe, Buckinghamshire, and Birmingham. All are being held in London.
Searches continue at several addresses and people were evacuated from some homes in High Wycombe.
Hand luggage ban
Meanwhile, chaos continues at UK airports with Heathrow the worst affected.
Thousands of flights have been cancelled and many more delayed.
Passengers who did make it on to flights were not allowed to take any hand luggage with them, apart from a few essential items in clear plastic bags.
Briton Pete Russell, who flew from London to Washington DC, said he had considered not travelling, but added that passengers on his flight seemed unfazed.
"There was no nervousness among the passengers but I did notice a little nervousness in the staff. They couldn't wait to land."
Sources at the Department for Transport have indicated that the current restrictions on hand baggage could become permanent.
One source told the BBC that the "way we travel will never be the same again".
Stephen Nelson, chief executive of airport operator BAA, said it was the first time that airports had "faced a security mandate of this scale and severity".
And Heathrow chief executive Tony Douglas said there would "inevitably" be delays at the airport on Friday and passengers should arrive prepared.
Home Secretary John Reid said the government was "confident" the ring leaders were in custody but it was not complacent.
Travellers in the US also suffered delays
He said had the plot been successful, it would have meant "loss of life on an unprecedented scale".
Prime Minister Tony Blair, on holiday in the Caribbean, paid tribute to the police and the security services.
US President George W Bush said the alleged plot was a "stark reminder that this nation is at war with Islamic fascists who will use any means to destroy those of us who love freedom".
An FBI spokesman said that it was "operating at a heightened level" as a result of the terror alerts and "sharing information and co-operating with domestic and international law enforcement and intelligence authorities".
BBC security correspondent Frank Gardner said while the main suspects are reported to have been arrested, it was likely that other individuals will also be sought for questioning by police.
"What I'm being told is that they've got all the major players who they believe were involved in this plot, the A-team as it were.
"There are other people on the periphery who they would probably like to try and get hold of and question. They may not actually find any evidence on them.
"But given the slip-ups that were made over [7 July bomber] Mohammad Siddique Khan a few years ago, that's quite an important thing.
"He was on the periphery of another investigation and they let him go.
"It's perfectly possible that there are some people connected to this who are more dangerous than our own security and intelligence services actually believe they are at the moment."