The Mounties delivered three tons of potential bomb-making material to a group said to have been planning a string of al Qaida-inspired attacks.
According to reports the Royal Canadian Mounted Police investigators delivered the ammonium nitrate to a group of Muslim Canadians, then moved in quickly on what officials call a suspected home-grown terror ring.
Investigators learned of the group's alleged plan to bomb targets around Ontario, then controlled the sale and transport of the fertiliser.
Authorities refused to discuss the reports and have revealed few details of the purported plot, or how the sting developed. A government official, speaking anonymously because of the investigation, said web surfing and email among the suspects led to the start of the inquiry in 2004.
Canada's ambassador to Washington, Michael Wilson, alluded to that in a later interview. "My understanding of it is that the internet played a very important part of it. Whether there was a direct inspiration or an indirect inspiration, the internet was, according to the police, a very important part of their activities," Wilson said.
US secretary of state Condoleezza Rice said the Canadian operation was "a great success for the Canadians".
Police arrested 12 people aged 19 to 43 and five suspects under 18 on Friday and Saturday on suspicion of plotting attacks with explosives on Canadian targets. Police said the suspects, all citizens or residents of Canada, had trained together.
Cpl Michele Paradis, a spokeswoman for the Mounties, said no more arrests were expected in coming days. "Once we once analyse and sort through everything that was seized as a result there may be (more arrests)," she said. "At this point we are confident that we have the majority of people."
The 17 suspects represent a spectrum of Canadian society, from the unemployed to the college-educated. Officials said the operation that led to the 17 arrests involved some 400 intelligence and lawenforcement officers and was the largest counter-terrorism operation in Canada since the adoption of Canada's Anti-Terrorism Act following the September 11 2001 attacks.