Danish police arrested five people suspected of planning a Mumbai-style attack to kill as many people as possible in a building housing a Danish newspaper that outraged Muslims in 2005 with cartoons of Prophet Mohammad.

"It is our assessment that this is a militant Islamist group and they have links to international terrorist networks," Jakob Scharf, head of Denmark's PET security police, told a news conference.

Police found a machine gun with a silencer, ammunition and plastic strips that could be used as handcuffs in the attack that Scharf said was planned for January 1.

The suspects had planned to enter a Copenhagen office block housing several newspapers including offices of the daily Jyllands-Posten to "kill as many as possible of those around".  

"It is our assessment, based on our investigation, that the plans were to try to get access to the location where the Danish newspaper Jyllands-Posten is situated in Copenhagen and try to carry out a Mumbai-style attack on that location," Scharf said.   

Many foreigners, some of India's wealthy business elite as well as poor commuters, were among the 166 people killed by 10 Pakistani gunmen in a three-day coordinated attack through some of Mumbai's landmarks, including two hotels and a Jewish centre.

Scharf said authorities could not rule out the possibility that the plotters may be linked to David Headley, a Chicago man who was arrested in October 2009 and pleaded guilty in March this year to scouting targets for the Mumbai attack.   

Four of the five suspects were detained at flats in two Copenhagen suburbs, and one in Stockholm.   

In Washington, White House spokesman Nick Shapiro said: "We commend the work done by the Danish and Swedish authorities to disrupt this plot, and will continue to coordinate closely with them and our other European partners on all counterterrorism matters of common concern."         

Jyllands-Posten was the newspaper that first published the Mohammad cartoons, provoking protests against Danish and European interests in the Middle East, Africa and Asia in which at least 50 people died.

Danish Justice Minister Lars Barfoed said those detained had a "militant Islamic background" and called the plan the most serious such attempt in Denmark so far.

Danish police detained a 44-year-old Tunisian national, a 29-year-old Swedish citizen born in Lebanon, a 30-year-old Swedish national, whose country of origin was unknown and a 26-year-old Iraqi asylum applicant, the PET said.   

Simultaneously, Swedish authorities in Stockholm detained a 37-year-old Swedish citizen of Tunisian origin. All but the Iraqi were Swedish residents, it said. The suspects will be charged with attempted terrorism, PET said.   

Swedish police began surveilling three of the suspects in Sweden before they entered Denmark on the night of December 28, Denmark's PET and Sweden's security police SAPO said.   

"Through extensive intelligence work we got information that there were individuals, persons in Sweden, planning terror actions in Denmark," SAPO chief Anders told the news conference.

"We contacted our Danish colleagues and we decided to make a joint investigation."    

Danielsson said that the Denmark plot did not have any known links to December 11 bomb blasts in Stockholm.  - Reuters