"Sweden has probably been naive in this regard. Perhaps it has been difficult for us to accept that there are, in our open society, people, Swedish nationals, who sympathise with the killers and with Islamic State," Lofven told reporters in Stockholm.
He announced a slew of measures aimed at foiling planned attacks.
He said the government wanted to give security authorities the right to eavesdrop on electronic communications such as Skype and Viber.
Border controls, which Sweden reinstated on November 12, would also be extended until December 11.
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In addition, new laws would make it illegal "to take part in terrorism training, travel to commit or prepare terrorist acts, travel with the aim of being trained as a terrorist, as well as financing such travel," Lofven said.
The announcement came one day after Sweden raised its threat level by one notch to the second-highest level, and police said they were hunting for a man wanted for "planning a terrorist act".