The interior ministry said members of Takfir wal-Hijra- a group formed in Egypt in the late 1960s and outlawed in Russia in 2010- had been discovered hiding weapons and suicide belts along with extremist literature.
Footage aired on Russian national news channels showed helmeted riot police burst into a high-rise apartment in a pre-dawn raid and throw several men face down on the floor.
Police were shown opening plastic bags holding grenades and pistols as well as a heavy black object identified by one unnamed officer as an explosive belt.
Russia remains on heightened security alert ahead of the February 7-23 Winter Olympic Games in the Black Sea resort of Sochi that lies near the volatile North Caucasus.
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A top North Caucasus guerrilla commander who has claimed responsibility for a string of deadly suicide bombings in Moscow has threatened to target the Sochi Games.
Officials in 2011 claimed to have uncovered a complex terror plot against the Games by Islamist rebels who allegedly used little-policed mountain regions of Georgia as their base.
Takfir wal-Hijra was quashed in Egypt in the 1970s but is believed to have cells linked to Al-Qaeda in several European and other countries.
The TrackingTerrorism.Org website said members of the puritanical group have included the 9/11 US terror attack pilot Mohamed Atta and former Al-Qaeda leader in Iraq, Abu Musab al-Zarqawi.
Russia's RIA Novosti state news agency said the group's activities were first detected in ex-Soviet nations such as Ukraine about five years ago.
But RIA Novosti said experts questioned whether Takfir wal-Hijra members in the region had actual links to the original organisation in Egypt or had simply assumed the name of a relatively well-known terror group.