Some 19 people were arrested in the police operation, which saw the US embassy warn its citizens to take shelter.
The authorities say the suspected al Shabaab
terrorist cell was planning an assault on the capital Kampala.
People in the city have been urged to remain
vigilant.
The authorities say they
have increased security at hotels and other sites
Information Minister Rose Namayanja said:
"The operation is still going on. We just want to ensure that we exhaust
all the leads so that there are no more terrorist cells."
"Anything could have happened," if
the plot had not been foiled, the minister said.
The discovery of the alleged cell came as
Kenya prepared to mark the first anniversary of an al Shabaab attack on
Nairobi's Westgate shopping mall in which 67 people were killed.
Both Kenya and Uganda contribute troops as
part of the African Union peacekeeping force battling al Shabaab in Somalia.
The militant group, which is aligned with al
Qaeda, has threatened more attacks since the killing of their leader Ahmed Godane
in a US strike earlier this month.
Last week, the group targeted two military
convoys near the Somali capital, Mogadishu, and on Saturday militants gunned
down a senior Somali national security officer in his car.
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