As part of the operation, homes were search in the Saxony area

Five people have been arrested in Germany on suspicion of founding a right-wing terror group to attack refugee homes and other facilities.

The Freital Group, named after a suburb of the eastern city of Dresden that has seen a string of anti-refugee protests and other incidents, was formed in July last year or earlier, federal prosecutors said.

They said several apartments in the state of Saxony were searched alongside the arrests of the five German nationals - four men and a woman aged between 18 and 39.

"With today's operation, the security authorities have dealt a powerful blow to a regional right-wing terrorist group," interior minister Thomas DeMaiziere said, adding that the operation involved federal agents, federal police and Saxony state police.

"This shows that the state is moving decisively and early against far-right terrorist structures and criminals."

The group acquired more than 100 firecrackers of various types from the Czech Republic, prosecutors said in a statement.

They said members are believed to have carried out three attacks in September and October - two on refugee homes in Freital and the other on a left-wing housing project in Dresden - in which windows were blown out and one asylum-seeker suffered facial cuts. Prosecutors are looking into whether they were behind any further attacks.

The suspects were identified only as Justin S, Rico K, Maria K, Sebastian W and Mike S in line with German privacy rules.

As well as membership of a terrorist organisation, they are also suspected of offences including attempted murder, bodily harm and bringing about explosions.

Three other men - including the group's two alleged leaders - are suspected of co-founding the Freital Group and are already in custody on suspicion of causing an explosion.

Germany has seen a surge in far-right attacks over the past year amid a huge influx of refugees and other migrants.