Detectives on both sides of the Border were last night questioning a number of men about the Omagh bomb which killed 29 people and injured more than 300.
Gardai arrested five people in Dundalk, Co Louth, and the RUC was reported to be interrogating at least two more.
The men were arrested in a closely co-ordinated series of raids which began around 7 a.m. yesterday. Police sources North and South described the arrests as significant.
However, dissident republican sources along the Border dismissed the arrests as a "PR stunt". Three of those arrested in Dundalk are being held in Monaghan, the base for Garda investigations into the bombing. One man who is being held is in his 50s and lives in north Louth. He has been arrested before for questioning about the activities of the Continuity IRA.
Another two are being questioned in nearby Carrickmacross, the town where the car used in the attack was stolen. One of the men is from the North.
It is understood that two are in their 30s, one is in his 40s, one in his 50s and another is in his 60s. Some are well-known local republicans.
They are detained under Section 30 of the Offences Against the State Act. They can be detained for a total of 48 hours, that is, 24 hours renewable on the authority of a chief superintendent.
It is believed that one of those arrested has a previous conviction for paramilitary offences and another is currently on bail. There are also unconfirmed reports that a father and son are among those arrested.
The RUC was uncharacteristically vague about the arrests in the North and would say only that several people were being questioned. It refused to say how many, from what area, and where they were being held.
Dissident republican sources last night said they were still unable to establish who had been arrested, although there were media reports that two men were from south Armagh.
The arrests were welcomed by Ulster Unionist Assembly member Mr Michael McGimpsey. "Obviously we are awaiting the outcome of these arrests but I hope it is a sign progress is being made by the Omagh bomb investigators," he said.
No one has been charged in connection with the explosion which took place six months ago. However, in recent weeks security sources on both sides of the Border have claimed to be making progress in their investigation.
Last month, the Garda Commissioner, Mr Pat Byrne, said there would be "no let-up" in efforts to find those responsible and he expressed confidence that there would eventually be prosecutions.