A senior Belgian counterterrorism official told CNN overnight Thursday-Friday the busted terror cell in the eastern town of Verviers is most likely linked to the Islamic State terror group.

Meanwhile, a senior Western official told the TV station that European intelligence services believe there are some 20 jihadist sleeper cells in Europe.

Police on Thursday shot dead two suspects in eastern Belgium as they were about to launch “large-scale” attacks in the country after returning from Syria, prosecutors said. They said a third suspect was arrested in the eastern town of Verviers and that the police had carried about 10 raids in all, including in the capital Brussels, after surveillance suggested an attack was imminent.

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The unnamed Belgian official told CNN that several members of the Verviers cell had traveled to Syria, were given instructions by the Islamic State, and were to carry out attacks on European soil in retaliation for the US-led airstrikes on jihadists in Iraq and Syria.

A Western official quoted by the TV station said there are between 120-180 operatives in some 20 sleeper cells, awaiting orders to carry out attacks in France, Germany, Belgium and the Netherlands. The threat to Belgium was deemed “imminent,” the official said, and the Netherlands is also at risk.

Meanwhile, the security alert in Belgium was raised nationwide from two to three overnight Thursday-Friday, its second-highest level.

On Thursday, Belgian officials said that there was no known link at this stage between the Belgium plot and a series of deadly attacks in Paris last week.

The prosecutor’s office said operations were still under way after 00:30 Friday and arrests were still expected.

Leaders of the country’s Jewish community decided to cancel classes and close schools Friday in Antwerp and Brussels after they were informed that they were potential targets, according to the website Joods Actueel.

The incident comes as Europe is on high alert after 17 people were killed in Islamist attacks — on the Charlie Hebdo magazine; on a policewoman; and on a Jewish supermarket — in Paris last week.

In May 2014, four people were shot dead in a suspected Islamist attack at the Jewish Museum in Brussels. Frenchman Mehdi Nemmouche, who had previously been in Syria, has been charged with murder.

The men targeted in Verviers were under surveillance, having returning from Syria a week ago, Belgian media reported.

Intelligence indicated they were planning an attack, the reports said.

Several reports said a series of other anti-terror raids were under way across Belgium, including in the capital Brussels, where the European Union is headquartered.

Residents reported gunfire and blasts in the raid on a former bakery in central Verviers.

“I heard a sort of explosion, followed by several gunshots,” one local resident told RTBF. “For the moment, I cannot tell you any more, because I don’t dare go out to see what is happening.”

Another local resident said “machine guns were firing for about 10 minutes.”

A third witness said he saw two young men apparently of North African origin “dressed all in black carrying a bag of the same color,” adding that the pair looked terrified.

Three Islamic State militants threatened attacks on Belgium in a video broadcast on Wednesday, the Belga news agency reported.

Paris gunman probe

Belgian investigators said earlier Thursday they were probing whether an arms dealer sold weapons used in the Paris attacks, after confirming supermarket gunman Amedy Coulibaly sold the man a car belonging to his partner Hayat Boumeddiene.

There was no immediate confirmation of any link between the Coulibaly investigation and Thursday’s raid.

The man, Neetin Karasular, from the airport city of Charleroi in French-speaking southern Belgium, is in detention on suspicion of a possible link to the weapons used in the Paris attacks.

“The issue of weapons is under investigation,” prosecutors’ office spokesman Eric Van der Sijpt told AFP, adding that Karasular was under suspicion for “arms trafficking.”

Belgian prosecutors are working with French authorities to establish any “possible link” to last week’s Paris attacks.

Coulibaly, who was killed by police on Friday, is also believed to have shot dead a policewoman in another Paris attack.

Van der Sijpt added that the Belgian suspect “bought the car belonging to Coulibaly’s wife.”

Karasular handed himself into police on Tuesday, saying he had been in contact with Coulibaly in recent months and had tried to “swindle” the Frenchman over the car deal, but was scared after the Paris attacks.

Investigators searched his house and found documents proving the sale of the vehicle and papers showing negotiations with Coulibaly about arms and ammunition, including a Tokarev pistol of the sort used by the Frenchman during the supermarket attack, Belga said.

Karasular will appear before a magistrate in Charleroi on Monday, who will decide whether he will remain in custody.

Spain meanwhile opened an investigation Thursday into Coulibaly and Boumeddiene’s visit to Madrid shortly before the attacks.

Turkish authorities say Boumeddiene crossed into Syria on January 8 from Turkey. She had arrived in Istanbul on a flight from Madrid before the Paris attacks took place.