The seven, reportedly of North African origin, were arrested in Switzerland and had been in contact with other groups of suspects in France and Spain, the Swiss attorney general's office said on Thursday.
The office gave no details as to what kind of attack was planned or where it was intended to take place. It also said no explosives had been found.
"The inquiry has... made it possible to show that this cell had very seriously envisaged committing an attack in our country on an airliner belonging to the El Al airline," the office said in a statement.
El Al operates regular scheduled flights from Tel Aviv to Zurich and to Geneva.
Israel's Yedioth Ahronoth newspaper reported last month that Swiss and French intelligence agents had foiled a plot to shoot down an El Al plane over Geneva in December using a rocket-propelled grenade.
One of the Swiss suspects was in touch with an Algerian, known as Mohamed Achraf, who was extradited to Spain last year.
"The inquiry [shows] this cell had very seriously envisaged committing an attack in our country on an airliner belonging to the El Al airline"
Swiss attorney general office statement
Swiss news website Swiss Info said Achraf was arrested in Switzerland and was the suspected mastermind of a plot to attack a court building in Madrid.
A first round of arrests was made near Zurich and Basel on May 12. These were followed by more arrests in other parts of Switzerland.
"Those who were arrested in Switzerland maintained contact with similar cells in France and Spain, which were likewise smashed," the statement added.
Police began investigating the group after a series of robberies was committed early last year by what the attorney general's office described as a highly organised group of about a dozen people.
An investigation revealed that "a part of the stolen booty was transferred for the benefit of a terrorist organisation," said the statement.
An attack on a Kenyan hotel used
by Israelis killed 12 people in 2002
French police confirmed that they had been involved in a joint anti-terrorist operation with Swiss and Spanish police.
"An operation took place which led to arrests in several countries," a police spokeswoman said.
"Individuals have been detained for questioning in France and operations are continuing," she added.
In November 2002, missiles narrowly missed an Israeli passenger airliner leaving Mombasa in Kenya for Tel Aviv.
Al-Qaeda claimed responsibility for the attack, as well as bomb blast in a Kenyan hotel which left at least 12 people, including several Israeli tourists, dead.