UPDATE 1-Germany uncovers right-wing cell as arsonists hit refugee shelter

May 6, 2015 1:09 PM

* Police hold 4 said to have plotted attacks on Muslims

* Asylum shelter roof set on fire in separate incident

* Hostility rising as number of asylum requests grows (Recasts adding right-wing cell, details and reactions)

By Stephen Brown

BERLIN, May 6 (Reuters) - German police detained four people suspected of setting up a right-wing extremist group that was planning bomb attacks on Muslims and refugees, as a separate investigation began into arsonists who damaged a shelter for asylum-seekers.

The developments underline concern about increasing hostility towards rising immigration in Germany, which last year saw the emergence of grassroots anti-Islam group PEGIDA (Patriotic Europeans Against the Islamisation of the West).

PEGIDA's marches in Dresden have been peaceful, but the new group, called "Old School Society" (OSS), intended to "carry out attacks in Germany in small groups against notable Salafists, mosques and asylum-seekers' shelters," public prosecutors said.

Salafists follow an ultra-orthodox form of Sunni Islam, but the term is sometimes used in the West as a synonym for Islamic militants.

"To this end, from what we know so far the four people detained obtained explosives for possible terrorist attacks," said prosecutors, adding that it was not yet clear if the group already had specific targets or dates in mind.

The four, all German citizens, comprise three men and one woman aged from 22 to 56.

In 2011, Germany was shocked by revelations that a small right-wing cell, the National Socialist Underground (NSU), had murdered nine immigrants and a policewoman, and carried out bombings and bank robberies. Security services and police had failed for a decade to detect the NSU's existence.

Two of its members committed suicide after a bank robbery and a third suspect, Beate Zschaepe, is on trial.

Security services in North Rhine-Westphalia (NRW) state have had one of the four OSS members, Olaf O., under surveillance since last November, said NRW Interior Minister Ralf Jaeger, praising his state's "timely and decisive action against far-right scum."

SEEKING ASYLUM

The number of people seeking asylum in Germany surged 60 percent last year and the interior minister is reported to have said it could double to 400,000 in 2015.

Authorities say attacks against asylum-seekers' shelters are also becoming more frequent. About 150 incidents of arson or graffiti including swastikas and other Nazi symbols were reported in 2014, rising sharply at the end of the year.

The latest attack in the western town of Limburgerhof, in which nobody was hurt, was similar to an attack last month in Troeglitz in the east which sparked a debate about racism.

Police said unidentified people set fire overnight to roofing felt on housing being prepared for 16 aslyum-seekers, causing 50,000 euros worth of damage. "We cannot yet assess if there's a racist background to this," police said. (Reporting by Stephen Brown; editing by John Stonestreet)