Singh's comments came nearly two months after a series of bombs on commuter trains in Mumbai, India's financial hub, killed 186 people. The attack was blamed on Islamist militant groups with links across the border in Pakistan.

India has since been on a heightened security alert, with fears of more attacks across the country, particularly in New Delhi and Mumbai, and at airports after British police last month said they foiled a plot to bomb trans-Atlantic flights.

"Concern about the increasing activities of externally inspired and directed terrorist outfits in the country is justified," Singh told an internal security meeting.

"Intelligence agencies warn of a further intensification of violent activities," he told the meeting, attended by chief ministers of states and top federal security officials.

The attacks could be carried out by suicide bombers and also target Indian army camps and other vital installations such as nuclear plants, he said.

"Reports also suggest that terrorist modules and 'sleeper cells' exist in some of our urban areas, all of which highlight the seriousness of the threat."

Tuesday's conference aims to discuss and fine-tune security strategies to tackle terrorism and insurgencies across the country as well as improve coordination between New Delhi and the states.

Besides terrorism, the meeting is expected to discuss the revolt against Indian rule in the disputed Himalayan region of Kashmir, Maoist violence across a swathe of eastern, central and southern India and insurgencies in the troubled northeast.

Although there were signs of improvement in Kashmir over the past two years -- coinciding with the launch of peace talks between India and Pakistan -- Singh said it was necessary for New Delhi to maintain its guard as "anti-India" elements continued to whip up emotions.

Indian states were not doing enough to fill up vacancies in their police forces and needed to bring "beat constables" into the work of helping pre-empt militant attacks, he said.

At the same time, he said there was an urgent need to counter a sense of alienation among India's roughly 140 million minority Muslims and ensure that efforts to stamp out Islamist militancy do not victimise the entire community.

Singh also announced the formation of a special panel of ministers, which would include the federal interior minister and chief ministers of select states, to monitor the spread of Maoist violence and coordinate efforts to counter it.

New Delhi has been worried about rising attacks by Maoist rebels -- who say they are fighting for the rights of the peasants and rural poor -- and Singh has in recent months called it India's the most serious security challenge.

Thousands have been killed in Maoist violence since the revolt began more than three decades ago in eastern India and has since spread to 13 states.