He said the gang hatched the plot in November and travelled through Xinjiang last month seeking recruits, including those skilled in weapons and explosives production.
Members of the Xinjiang region's Muslim Uighur ethnic group have been pressing for an independent state, while Beijing has sought to portray the separatists as being linked to global terrorists networks.
However, many experts and analysts have said that there is little evidence to support this and membership of the separatist groups is believed to be small.
Wu said that another cell, allegedly uncovered in the Xinjiang capital Urumqi in January was planning poison and bomb attacks before the games.Security heightened
China heightened security following unrest in Tibet, as well as nearby regions with Tibetan populations, and reports of at least one pro-independence demonstration in Xinjiang.
The situation in Tibet has also prompted protests which have disrupted the Olympic torch relay in Athens, London, Paris and San Francisco.
Officials overseeing the torch route in San Francisco on Wednesday cancelled the planned closing ceremony on the city's waterfront.
However, the head of the International Olympic Committee, said that the route would not be altered or shortened.
"This scenario [to change the route] is definitely not on the agenda," Jacques Rogge said at a news conference in Beijing.