One grenade was used in the attack on a nightclub in Puchong in June, while the police recovered another in Johor.

However, Special Branch counter-terrorism assistant director Ayob Khan Maidin Pitchay said intelligence reports revealed that terrorists in Malaysia could still be in possession of eight grenades.

"We have eight more (grenades) still in the market," he told Channel News Asia.

Ayob said the attack on the Movida nightclub raised alarm bells, because it was the first case where Malaysian Islamic State members based in Syria could remotely launch an operation at home.

"Before this, our assessment was that they don't have expertise to assemble IED (improvised explosive devices) because they were never trained.

"But with the Movida bombing it's clear they have the connection and ability to get weapons from neighbouring countries and that is our main concern now," he said.

Ayob also disclosed that the terrorists are possibly planning more attacks on government offices, entertainment outlets and the army and police headquarters.

The police believe the Movida attack, which left eight injured, was executed upon the instructions of Mohd Wanndy Mohd Jedi - a Malaysian IS member operating in Syria.

Mohd Wanddy is believed to have set up several terror cells in Malaysia.

"He will have one cell comprising 10 people in Cell A and maybe in Cell B there'll be 20. There is no connection between the two.

"If we arrest all in Cell A, they will not know about the existence of Cell B. He is using a new technique - it's almost impossible for you to identify them because they are all operating in different cells," said Ayob.

To make matters worse, Wanndy is not the only one as there are other Malaysians in Syria who are urging their supporters to carry out lone wolf attacks at home.

As for the grenades still unaccounted for, Ayob said these were old models, dating as far back as 1987, but still lethal.

Editor's note: This article has been amended following changes to the original interview.