The CIA claim to have disrupted a plot by al-Qaeda in Yemen to blow up a plane bound for the US with a new, improved version of the "underwear bomb" used in an attempted attack in 2009.
The alleged attack had been planned to coincide with the one-year anniversary of the death of Osama Bin Laden.
US officials said the device had all the "previous hallmarks of al-Qaeda in the Arabian Peninsula" but with one crucial difference; the FBI said the device did not contain any metal, meaning it could have passed through airport security undetected.
Juliet Bremner reports on the threat of a seemingly "undetectable" bomb.
The CIA said the plot was similar to an attempted attack on Christmas Day in 2009 when Umar Farouk Abdulmutallab travelled to Detroit with a bomb hidden in his underpants. He tried to detonate the device unsuccessfully and set his pants on fire.
Although it is not clear who built the bomb, it is suspected to be the work of "master bomb maker" Ibrahim Hassan al-Asiri or one of his proteges.
Al-Asiri constructed the first underwear bomb device in 2009 and is said to be responsible for the two "viable" explosive devices shipped to the US on cargo plans in 2010.
The CIA is said to consider the Yemen-based al-Qaeda network as the most dangerous of the groups that have sprung up sinece 9/11.
U.S Secretary of Defence, Leon Panetta, said the incident showed the country must continue to be vigilant.
US officials said that the plot had been uncovered before the bomber had finalised his plans. They also said the would-be bomber had not picked a target or bought a plan ticket.
It is not clear what has happened to the alleged bomber, or where he is being held.
White House spokeswoman Caitlin Hayden said President Barack Obama learned about the plot in April and was assured the device posed no threat to the public.
Speaking in New Deli this morning US Secretary of State Hillary Clinton said although the device itself did not seem to be a real threat it did show the "perverse" persistence of terrorists.
She also warned that the US would go after "anyone" who posed a direct threat to them, or their allies.
The FBI and US Department of Homeland Security acknowledged the existence of the bomb, but there are no immediate plans to adjust security procedures at airports.