"Terrorists" from home and abroad seeking an independent Muslim state for China's northwest Xinjiang region were involved, authorities said as security was increased there after an attack on Monday that killed 16 policemen.
The terror alert came as athletes continued to arrive in Beijing ahead of Friday's opening ceremony to launch the Games, which are being seen as a coming-of-age party for China after three decades of dramatic economic reforms.
"We can see clearly that these forces are trying to wage a psychological and violent battle against the Olympics," said Shi Dagang, Communist Party secretary of Kashgar, a city in the Xinjiang region that borders Central Asia.
"They want to turn the year 2008 into a year of mourning for China."
Shi said Xinjiang police had arrested 18 foreign "terrorists" this year, and that a major threat came from the East Turkestan Islamic Movement (ETIM), a UN-listed terror group that reportedly operates in Xinjiang and Afghanistan.
Shi indicated the ETIM may have been involved in Monday's attack in Kashgar, as the explosives the two assailants used were similar to those found during a raid on one of the group's bases in Xinjiang last year.
"For these two people, it is very clear that they are part of violent terrorist forces," Shi said.
Nevertheless, Beijing Olympic organisers sought to reassure the 10,000 athletes and 500,000 other expected foreign visitors coming to China for the Games that they should not be concerned about security.
"We can guarantee a safe and peaceful Olympic Games," organising committee spokesman Sun Weide told reporters.
China has already employed intense security throughout Beijing and across the country in the lead-up to the Games, with some veteran sporting officials saying they had not seen such a show of force since the 1980 Moscow Olympics.
In Xinjiang, members of its Muslim Uighur ethnic group have complained for months of a massive security crackdown that has seen many people detained.
Xinjiang has about 8.3 million Uighurs, and many are unhappy with what they say has been decades of repressive Communist Chinese rule.
China announced security was ramped up to another level on Tuesday across Xinjiang, and in particular the famed oasis city of Kashgar.
The official Xinhua news agency said police had increased road checks, while extra security forces had been sent to guard government office buildings, schools and hospitals.
In Beijing, some athletes appeared more concerned that the final preparations for the biggest event of their lives were being hampered by the city's poor air, which has persisted despite emergency clean-up measures.
Indonesian weightlifting team official Syafraidi Cut Ali said his squad were under strict instructions to stay in the open air as little as possible.
"We stay in our bedrooms and the dining rooms, not in the open," Ali said. "It is a problem."
Members of the US cycling team were also seen arriving at Beijing airport wearing masks.
However the International Olympic Committee's medical commission chairman, Arne Ljungqvist, said pollution levels were not as bad as first feared and blamed the media for exaggerating the issue.
"I'm confident the air quality will not prove to pose major problems to the athletes and to the visitors in Beijing," Ljungqvist said.
He said the media's reporting had convinced such stars as Ethiopian greats Haile Gebrselassie and Kenenisa Bekele and British marathon runner Paula Radcliffe that competing here might damage their health.
However, IOC president Jacques Rogge had said during the one-year countdown to the Games last August that endurance events such as the marathon may have to be postponed if pollution levels were severe.
More than one million of Beijing's 3.3 million cars were taken off the roads last month and many heavily polluting factories were temporarily closed down in an effort to improve the city's air quality.
China has said it may implement further emergency measures later this week, such as taking more cars off the roads and shutting other factories.
Agence France-Presse - 8/5/2008 12:56 PM GMT
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