LONDON, England (CNN) -- Terrorists were in the "final stages" of a plot to simultaneously blow up as many as 10 jets leaving Britain for the U.S., sending the planes and thousands of passengers into the Atlantic Ocean, U.S. Homeland Security Secretary Michael Chertoff said.
British and Pakistani authorities teamed up to thwart the attacks, and 24 men were arrested in raids in Britain, authorities said Thursday.
An undercover British agent infiltrated the group, giving the authorities intelligence on the alleged plan, several U.S. government officials said. (Watch as neighbors describe the dramatic arrests -- 2:18)
The men had not bought plane tickets, the officials said, but they were in the process of perusing the Internet to find flights to various cities that had similar departure times.
Two of the suspects recently traveled to Pakistan and later received money wired from there, senior U.S. government sources said. (Watch how the plot had earmarks of al Qaeda -- 3:19)
Among those arrested were a Muslim charity worker and a Heathrow Airport employee with an all-area access pass, according to Britain's Channel 4.
The suspects were planning to stage a test run within a couple of days, said a U.S. intelligence official.
The suspected terrorists had been under surveillance in Britain since last December, Channel 4 reported.
A senior congressional source said it is believed the plotters planned to mix a British sports drink with a gel-like substance to make a potent explosive that could be ignited with an MP3 player or cell phone. (Watch how liquid explosives could be devastating -- 2:32)
The sports drink could be combined with a peroxide-based paste to form a potent "explosive cocktail," if properly done, said a U.S. counterterrorism official.
"There are strong reasons to believe the materials in a beverage like that could have been part of the formula," the official said.
As many as 50 people were involved in the plot, an internal Department of Homeland Security document said.
While other arrests were possible, British Home Secretary John Reid said that "police are confident that the main players are accounted for."
Information gathered after recent arrests in Pakistan convinced British investigators they had to act urgently to stop the plot, sources said.
Pakistani authorities also made arrests in coordination with Britain, said a spokesman for the Pakistani Foreign Ministry. He did not say how many arrests were made.
Two of the suspects left "martyrdom tapes," according to sources familiar with the details of the British investigation.
Chertoff said the plans were "suggestive of an al Qaeda plot," and President Bush said the arrests are a "stark reminder" that the U.S. is "at war with Islamic fascists." (Watch Bush say what the arrests mean for the U.S. -- 2:37)
Bush thanked British Prime Minister Tony Blair for "busting this plot." (Full story)
The Bank of England on Friday froze the funds of 19 suspects who were arrested in connection with the alleged terror plot, a British Treasury spokesman said. (Suspects' names)
Plot felt worldwide
Authorities immediately banned all passengers headed to or departing from U.S. airports from carrying any liquid in their carry-ons. The massive lines that resulted at security checkpoints made air travel chaotic worldwide as flights were delayed or canceled. (Full story)
The effects of the plot rippled across the globe Thursday.
The U.S. raised the terror threat level to "severe," or red, for all flights leaving Britain for the United States. Britain raised its alert level to "critical." (Full story)
Air passengers across Europe faced a second day of delays on Friday, though the situation had eased from the previous day when London's Heathrow Airport was closed to many incoming flights. (Full story)
Besides banning carry-on bags, British police are also prohibiting passengers from carrying electronic key fobs, which have the potential to trigger bombs. (Watch travel chaos at Heathrow -- 2:41)
A U.S. administration official said the plot targeted Continental, United, British Airways and American Airlines flights to New York, Washington and California. (Map of flight delays)
Indications are that at least 21 of those arrested are British citizens and some were of Pakistani ethnicity, a senior U.S. intelligence official said.
In a sign of the heightened security, Chertoff said the U.S. was dispatching extra air marshals to Britain.
'Mass murder on an unimaginable scale'
Chertoff said the plotters were "getting close to the execution phase."
"There were very concrete steps under way to execute all elements of the plan," he said.
The plot was "intended to be mass murder on an unimaginable scale," London's Metropolitan Police Deputy Commissioner Paul Stephenson said. (Full story)
Chertoff said the plan was reminiscent of a plot by September 11 coordinator Khalid Shaikh Mohammed, who in 1995 had envisioned detonating bombs on 11 airlines possibly traveling over the Pacific Ocean.
The plot was "as sophisticated as any we have seen in recent years as far as terrorism is concerned," Chertoff said. (Watch Chertoff describe the "cutting-edge" plot -- 7:38)
The nation's overall threat level has not changed, but the threat level has been raised to "high," or orange, for all commercial flights operating in or coming to the United States, the DHS said.
Thursday was the first time the DHS has raised the threat level for a specific group of flights.
New security restrictions
"Due to the nature of the threat revealed by this investigation, we are prohibiting any liquids, including beverages, hair gels, and lotions from being carried on the airplane," a DHS statement said.
Increased security means airline passengers around the country should show up at least two hours early for all flights, an official with the Transportation Security Administration said. (Watch U.S. passengers cope with new rules -- 2:30)
British and U.S. security agencies quickly moved to impose strict limits on carry-on items in the wake of Thursday's arrests, causing extended delays at airport security checkpoints. (Full story)
The British Airports Authority said no hand luggage would be allowed onto planes leaving British airports until further notice.
British Airways canceled all short-haul flights in or out of Heathrow Airport for Thursday, and delays were stacking flights up at airports across Europe. (Full story)