By Elizabeth Blunt
BBC News, Addis Ababa
Security forces in Ethiopia say they have prevented an attempt by a rebel group to assassinate officials and destroy public institutions.
Thousands are expected in Addis Ababa for the millennium festivities
The police moved against what they say was a terrorist cell of the Oromo Liberation Front (OLF) last week.
They said the plot was aimed at targets in the capital, possibly at the time of the upcoming millennium celebrations.
Ethiopia has accused Eritrea of supporting the attempt, which the Eritreans described as ridiculous.
Police arrested suspects near the suburban town of Kaliti on their way to the capital, Addis Ababa.
A statement from Ethiopia's anti-terrorism taskforce blamed the plot on members of the OLF acting, it said, on behalf of the Eritrean government.
It said the president of Adama University was among their targets.
The official statement also implicitly linked the alleged plot to the planned New Year celebrations next month - the start of the year 2000 in the Ethiopian calendar.
A federal police spokesman would not say how many people were now under arrest, but Ethiopian television on Tuesday night showed pictures of two suspects - a young man and a young woman - along with a motorbike and weapons hidden under a load of oranges.
It also showed pictures of a house which it said was the gang's hideout in the town of Nazret, south-east of the capital.
Nazret, also known as Adama, is the regional capital of Ethiopia's Oromo region.
The statement also said the anti-terrorism taskforce was working tirelessly to ensure that people throughout Ethiopia could celebrate the new millennium free of security fears.
Large numbers of people are expected to celebrate the New Year on the streets of the capital and some kind of terrorist attack has to be a concern.
The venue of the main outdoor concert on New Year's Eve has been moved from the central Meskel Square to the National Stadium, where it would be easier to check those attending.
No-one yet has been charged with involvement in this alleged Nazret plot, and a police spokesman said investigations were still continuing.