Israel and Cyprus have foiled an Iranian plan to kill Israelis on the east Mediterranean island, Prime Minister Benjamin Netanyahu's office said in a statement on Sunday.
"The Cypriot security and law enforcement agencies, in cooperation with the Mossad (Israeli intelligence), thwarted an Iranian terrorist infrastructure that planned to carry out attacks against Israeli and Jewish targets in Cyprus," the statement said.
It followed confirmation by Cyprus police in Nicosia that they had arrested two people for "national security" reasons, after a media report that two Iranians were being held on suspicion of plotting to attack Israelis.
The newspaper Kathimerini Cyprus said the two Iranians were awaiting deportation.
It said they were political refugees with probable links to Iran's Revolutionary Guards, and had been in the early stages of gathering intelligence about targets.
Netanyahu's office said that after the arrests, "considerable information was obtained, which led to the discovery of the attackers, their modus operandi, the targets of the attack and the Iranian plan to kill innocents in Cyprus and elsewhere".
Cyprus police would only confirm to AFP that they made arrests.
"Two people have been arrested. We are investigating a terrorism-related case," a spokesperson said.
Israel's statement, issued on behalf of Mossad and the National Security Council, said Iran "has expanded its efforts to advance terrorism around the world" since the October 7 Hamas attacks on Israel.
Israel has vowed to destroy the Iran-backed Hamas after the attack, which it says killed 1,200 people, mostly civilians.
Israel's military offensive in Gaza has since killed at least 17,700 people, mostly women and children, according to the Hamas-run health ministry.
Cyprus has a sizable Israeli community as political ties have grown in recent years based on tapping regional energy resources.
The island also served as a transfer hub for foreign nationals evacuated from Israel following the outbreak of the Israel-Hamas war.
The statement from Netanyahu's office said Israel's National Security Council "and the intelligence community recently updated the threat level toward Israelis abroad and are continuing to instruct Israeli citizens accordingly".
Sunday's was the third reported case of plots against Israelis in Cyprus over the past two years.
In June, Mossad said it had detained an Iranian planning a terrorist attack against Israeli targets on the island.
In September 2021, Cyprus police arrested an Azeri with a gun who was trying to cross to the Turkish-occupied north of the island.
Mossad said it had actively prevented the contract killing of Israeli business people living in Cyprus.