Russia's Security forces have thwarted a major terror attack in the country's south.

The head of the FSB, Aleksandr Bortnikov, told President Dmitry Medvedev that terrorists planned to strike in the city of Pyatigorsk in the Stavropol region.

“On Tuesday a group of militants planned to carry out a terror act in Pyatigorsk,” Bortnikov said.

“During the special operation two of them were killed and four of them arrested,” he added. “More than 200 kilograms of explosives were seized. Essentially a makeshift explosives lab was found. This group is linked to the August blast in Pyatigorsk.”

The August terror attack left some 30 people injured when a car exploded outside a cafe on a busy street.

The attack is believed to have been organized by Chechen terrorist Doku Umarov, who claimed responsibility for the Moscow metro bombings in March that killed 40.

Umarov is thought to have links to Al Qaeda and is wanted for terrorism in Russia and abroad.