The feds have unearthed a possible terror plot for a New Year's Eve bombing at Seattle's famed Space Needle, where tens of thousands are expected to ring in the millennium.

U.S. Customs and Immigration agents discovered the nightmare plan with the arrest this week of a French-speaking Algerian trying to enter the country from Canada in a car packed with explosive materials.

The man identified himself as Canadian citizen Benni Norris. Authorities determined his real name is Ahmed Ressam, 32, an Algerian.

They think he's part of a larger Middle Eastern terrorist cell, whose members may have already entered the country, federal law-enforcement officials said last night.

Ressam was arrested Wednesday night while trying to enter the country from the Port Angeles ferry, which originates in Vancouver. Customs agents found hidden in the spare tire compartment of his rental car a series of bomb-making materials, including two jars of nitroglycerin, 100 pounds of urea, four timing devices using a 9-volt battery connector and a Casio watch, sources said. Nitroglycerin and urea were also used in the 1993 bombing of the World Trade Center.

Someone had reserved a room in the name of Benni Norris at a Best Western Loyal Motor Inn a few blocks from the Space Needle at Seattle Center -- the site of a large planned millennium celebration.  Stunned law-enforcement officials strongly suspect the Space Needle bash was the target and have launched a massive manhunt in the area for possible accomplices.

 "It's very concerning on the face of it and we're taking it very seriously," Jesse Chester, spokesman for the Seattle office of the U.S. Bureau of Alcohol, Tobacco and Firearms, told reporters.

"This is the real deal and evidence that we are reaching a critical mass as the millennium approaches in this country and overseas," added Harvey Kushner, a terrorism expert at Long Island University.

The arrest comes at a time when the State Department has issued a worldwide alert warning Americans to be careful during the holidays.

The alert was issued after a series of arrests in Jordan, Pakistan, Turkey and Egypt of operatives of Saudi terrorist mastermind Osama bin Laden, whom U.S. authorities believe is trying to launch a multiple series of coordinated strikes at Americans to coincide with the millennium and the Muslim holy month Ramadan, which ends Jan. 7.