The Islamist fighters who have returned from Syria or Iraq are preparing to launch attacks in Europe, The Times reported citing Spanish counterterrorism officers.
The Spanish officers referred to the number of jihadists residing on the continent who have been recruited by Islamic State or groups affiliated to al-Qaeda.
Another 350 or so Britons have returned from fighting in the war zone, with security sources acknowledging that some are plotting attacks in the UK specifically.
Those arrested are suspected of involvement in a network to send fighters to areas of Syria and Iraq under IS control, the BBC reported.
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Also on Friday, Ayoub El Khazzani, 25, a Moroccan gunman, was overpowered on a high-speed train travelling from Amsterdam to Paris. He was said to be an "Islamist returner," apparently having left France for Syria last year.
Counterterrorism sources quoted by Cadena Ser, a Spanish radio station, said about 800 extremists on the continent had been recruited by Islamic State or al-Qaeda-affiliated groups.
The sources were quoted as saying that they believed El Khazzani had been armed and given instructions by others before boarding the train, and discounted his claim that he was trying to carry out a robbery and was not a terrorist.
Anti-terrorist sources said they were tracking the movements of some of the 800 "returners", but did not know the whereabouts of all of them.
All have returned from conflict zones and are awaiting their opportunities to carry out an attack, they said.
More than 700 Britons are thought to have travelled to Syria and Iraq to support or fight for jihadist organisations. According to Scotland Yard, half of them have returned.