Germany's federal prosecutions office said three men and a woman, all Germans and aged between 22 and 56, were accused of forming a new terrorism organization calling itself the "Old School Society" (OSS).

The four had acquired explosives with "great power" and had intended attacks on mosques, hostels for asylum-seekers and well-known Salafists in Germany, said the prosecutions office based in Karlsruhe.

The news magazine "Der Spiegel" initially reported that 250 federal investigators had taken part in the early morning raids. Germany's commando-style GSG 9 police unit had arrested the four leading suspects.

Blaze damages hostel under construction

On Tuesday night, a fire caused an estimated 50,000 euros ($56,000) in damage to a hostel under construction in Limburgerhof, a small town in Germany's western state of Rhineland-Palatinate.

Local police said one or several perpetrators had set fire to rolls of bitumen roofing material. No one was injured, but a witness saw a small, black car being driven away with tires screeching.

Palatinate prosecutors said several motives were being examined.

Image loss for Germany

In early April, an arson attack on a planned hostel at Tröglitz in Germany's eastern state of Saxony-Anhalt drew international attention.

At the time, Foreign Minister Frank-Walter Steinmeier said he feared it would damage Germany's image.

Arrival numbers to double

On Tuesday, it was widely reported that Germany's Federal Office for Migration and Refugees (BAMF) was expecting 400,000 asylum-seekers this year, double last year's count.

German Development Minister Gerd Müller said the estimate was born out by entry figures for the first quarter of 2015.

In February, the BAMF had estimated an intake of 300,000.

States demand more funding

On Friday, Chancellor Angela Merkel's office in Berlin will host a special conference including representatives of Germany's municipalities and federal states.

Local bodies and the Länder are demanding more funds from the federal government to cover costs of accommodation and integration of refugees.

ipj/kms (Reuters, AFP, epd,dpa)