The trio - two of whom had practiced flying light aircraft - may have been plotting attacks in Spain or elsewhere in Europe according to Spain's interior minister.
The three - a Russian, a Russian of Chechen descent, and a Turk, were arrested after being watched by Spanish authorities for 'some time'.
In custody: Three unnamed suspected members of Al Qaeda, pictured, have been arrested in Spain
Police operation: Vehicles and personnel from the Spanish Police are seen outside an apartment at los Junquillos district in La Linea de la Concepcion, Cadiz, Southern Spain
Pictures of the suspects were released by Spanish authorities but they were identified only by their initials: C.Y. for the Turk and A.A.A. and M.A. for the other two.
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The mug shots showed three men who appeared to be in their 30s, two with crew cuts and one with hair down to his shoulders.
The Turk was arrested in the southern city of La Linea bordering the British colony of Gibraltar, while the other two were picked up near the central city of Ciudad Real as they traveled toward a northern Spanish town near the border with France.
Spanish Minister of Interior Jorge Fernandez Diaz, pictured, said enough explosives were found to blow up a bus
Enough explosive material was found in the house in La Linea where the Turk lived to blow up a bus, Interior Minister Jorge Fernandez Diaz said.
He added that investigators found no indications that the three were targeting Gibraltar but added that 'there are clear indications they could have been planning an attack in Spain and/or another country'.
He continued: 'This is one of the most important operations carried out against Al Qaeda' before calling one of those arrested as a 'very important member'.
He said the operation involved close collaboration with intelligence services from 'Spain's allies' without identifying any of the countries.
The arrests came as the Summer Olympics were being held in Britain under tight security against possible terrorist attacks, including military aircraft and ground-to-air missiles.
Spanish authorities had been watching the suspects for 'some time' and the minister added the decision to arrest them was made after the Russian and the Russian of Chechen descent took a bus towards France.
The two arrested in the bus were traveling from southern Cadiz to the northern town of Irun, possibly intending to cross into France, the minister said.
The pair had been in Spain for about two months. Cadiz is near the large U.S. military base in Rota alongside the Mediterranean.
'Police moved to arrest them when it became known that they planned to leave Spain' he said.
Fernandez Diaz did not disclose the suspects' names, but said two were suspected Al Qaeda operatives while the Turk was a facilitator.
Lethal: Police found enough explosives to blow up a bus at the property in La Linea de la Concepcion, Cadiz, Southern Spain
Target: It is not known if the trio were attempting to target the Olympics in London
The minister described one operative as a key member of the terror network and said both operatives had practiced flying in light aircraft. One was also an expert in explosives and poisonous substances, said Fernandez Diaz.
Spanish police have arrested dozens of Al Qaeda suspects since the Sept. 11, 2001, attacks in the United States, and more after the 2004 train bombings in Madrid.
Most Islamic-based terror arrests in Spain over the last several years have been of lower-level players and people trying to recruit jihadists, but the detention of the Russians and the Turk was significant because of their apparent high level of training and capability, said Magnus Ranstorp, a terror expert at the Swedish National Defence College.
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