The two men had taken steps to "create a paramilitary unit of 100 to 150 men" composed of former police officers and soldiers, the Karlsruhe federal prosecutor's office said.

Named as Arend-Adolf G. and Achim A., both German nationals and former members of the Bundeswehr, the two men are accused of starting to plan their "terrorist organisation" in early 2021.

Arend-Adolf G., who was responsible for recruitment, had already contacted at least seven people in the hope of bringing them on board "to intervene in the civil war in Yemen", the prosecutors said.

Both suspects were "aware that the unit they were to command would inevitably have to carry out acts of killing during their mission" and also expected civilians to be killed, the prosecutors said.

They had been hoping to secure funds from Saudi Arabia for the project and were intending to pay members 40,000 euros ($46,000) each.

Achim A. is accused of contacting representatives of the Saudi Arabian government and trying to arrange a meeting, but the government did not respond.

The pair were arrested by special forces on Wednesday morning in the district of Breisgau-Hochschwarzwald and in Munich, prosecutors said.

Properties were also searched in Munich and in the district of Calw, as well as Baden-Wuerttemberg and Bavaria.

The German government has been worried for years about some soldiers going rogue, especially those connected to far-right groups.

In early October, the army suspended soldiers in its ceremonial guard over suspicion of sexual aggression and sympathy with the far-right.

The elite KSK commando force was partially dissolved in 2020 after munitions were stolen and members were seen performing a Hitler salute at a party.

In June, a platoon stationed in Lithuania was recalled after accusations of racist and anti-Semitic behaviour.