Brazil's federal police thwarted a neo-Nazi plan to bomb two synagogues in Porto Alegre, a spokesman said.
The Jewish community there is "concerned but not panicked," a community leader told Haaretz.
On Monday, Police arrested 14 men and released them pending an investigation, a spokesmen said Thursday. Police also seized bombs, knives and Nazi literature.
"I have no doubt that we have aborted a major tragedy," Paulo Cesar Jardim, an inspector, told The Associated Press. Police said the men belonged to a 50-person group called "Neuland," established in 2002.
Jardim, who heads the police force in the southern Brazilian city, described the members as "extremely intelligent," and "very dangerous criminals who prey on Jews and gays in the name of racial purity."
However, a spokesman for the Brazilian foreign ministry in Brasilia told Haaretz: "We have heard this wasn't a very organized group. Their initiative was not very well articulated, but even in this form it is very important to combat Neo-Nazis."
The spokesman added: "Racism is one of the most hideous crimes in Brazil and the penalties for it are relatively high. We laud the police for its vigilance."
The arrests may be evidence of police vigilence, not increasing anti-Semitism, explained the head of Porto Alegre's Jewish community and president of the statewide Rio Grande do Sul Jewish Federation. "Porto Alegre does not have a special neo-Nazi problem," Henry Chmelnitsky told Haaretz yesterday. "It's just that our chief of police, Jardim, is very vigilant with regard to this issue."
Chmelnitsky added that the institutions that serve the community's 12,000 members are open as usual.
"We are concerned, but not panicked. We keep our eyes peeled and we are in constant contact with police. I am certain the situation here is calmer and safer than in France, for instance," he said.
Porto Alegre, Chmelnitsky added, may be slightly more vulnerable in terms of neo-Nazi activity because it has a more European population - primarily German and Italian - than many other parts of Brazil.
The last violent anti-Semitic incident there occurred in 2005, when neo-Nazis attacked two Jews at a bar. The two men were wearing skullcaps.
"The community reacted very harshly to the 2005 attack," said Perla Szaf, who immigrated to Israel from Porto Alegre. "There is little tolerance for these sort of incidents in Brazil."
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