Two Syrian nationals have been arrested in Geneva on suspicion of making, hiding and transporting explosives.
The Swiss prosecutor has told a news conference the pair had apparently just arrived and could not speak French.
Police found traces of explosives in their car but no toxic gas, as earlier suspected.
The two are also suspected of violating a law prohibiting groups such as al-Qaeda and the so-called Islamic State (IS), the statement added.
Geneva, the home of the European headquarters of the United Nations, has been on high alert this week because of fears that Islamist extremists are in the city.
The city's prosecutor, Olivier Jornot, told a news conference that the two Syrians were stopped by Geneva police "because of the increased vigilance required from the police force".
"These people, because of their behaviour and nationality, were subject to more careful checks, and these checks revealed traces of explosives in the car they were using."
An earlier statement from the prosecutor's office said criminal proceedings had been opened against them under Switzerland's law against the manufacture and transport of explosives and toxic gases, but the prosecutor confirmed that no toxic gas had been found.
The tip-off about a Islamic State cell in Geneva had originally come from the United States, Swiss media reported on Friday.
Daily newspaper Le Temps, quoting a source close to the investigation, said US intelligence had identified three jihadist cells in Chicago, Toronto and Geneva.
On Thursday, security was stepped up outside synagogues, the UN building and the French ambassador's home, as well as train stations and the airport.
The number of police on Geneva's streets has also been increased.
UN spokesman Michele Zaccheo said there was "no specific threat to the UN in Geneva or its personnel".
The border with France runs through the outskirts of Geneva.
IS said it carried out the attacks in Paris on 13 November which killed 130 people.
Two men linked to the attacks - Salah Abdeslam and Mohammed Abrini - are still on the run and investigations have been launched in several European countries.