Ireland is seen as soft on jihadis because of a lack of laws and specialist counterterrorism police.
Islamic extremists have started using Ireland as a base and transit zone after the introduction of new laws that limit their movement elsewhere in the EU, European police agencies have told Gardai.
Gardai are now monitoring the movements of a number of suspected jihadis, including one who recently arrived back into the country, as a result of intelligence from French, Scandinavian and German agencies.
The move comes as the French authorities clamped down on the movement of suspected Islamist terrorists trying to join IS (Islamic State) after the 'Charlie Hebdo' attacks in Paris.
But because Ireland has more lax passport regulations than other European countries, it has become a hub for jihadis making their way to war zones in the Middle East.
Many who cannot return home to the continent because of local laws are free to travel here and then move on.
Meanwhile, a chain of businesses in the country is being used to launder money and safehouses are also in operation.
Senior gardai say the force is not fit for purpose for dealing with international terrorism and a specialised intelligence service is required.
Gardai are working closely with their counterparts across Europe compiling intelligence on the movements of the terrorists. Security sources have revealed the Government is desperately trying to downplay the use of Ireland by the groups.
Last week, the Irish Independent revealed how a hard core group of Islamist terrorists - most of whom were granted political asylum in this country - were helping to co-ordinate logistics for terror groups such as al-Qa'ida and Isil.
High-level intelligence sources have discovered that prospective recruits for various Islamist terror groups have been sent on "training camps" in Irish mountains. The Irish Independent understands that one such camp took place on a mountain range in the east of the country in recent weeks.
Security sources revealed that those taking part - young men in their late teens and early 20s - were being "tested" to assess if they had the "mental and physical strength" to be jihadis.
It is understood that the potential Islamist terrorists were made to endure the hardships of living rough in the mountainous terrain, which included swimming in frozen lakes and camping under the elements.
"This was being done primarily to test if they have the mental and physical strength to be selected as jihadis," a security source revealed. "Those taking part are not necessarily aware that this is being done to test them out initially - there are no weapons or military tactics used and no laws were broken.
"Those considered to have potential and the correct religious orientation are then taken aside for more indoctrination and sent abroad to join IS in Syria," the source added.
Meanwhile, Gardai want officers armed again with Uzi sub-machine guns to counter the threat from Islamic terrorists. Armed officers have complained for more than two years after the Israeli-made weapons were withdrawn from use and replaced with handguns.
However, gardai believe attempted attacks by terrorists are now possible and they are not equipped to deal with them.
They say the Sig semi-automatic handguns they have been equipped with are no match for the high-powered Uzi, and the country cannot rely on the five armed regional response units.
There was an important gathering in Dublin Castle this week when ambassadors and heads of Irish missions in 80 locations worldwide convened for a major conference on Irish foreign policy. 'The Global Island: Ireland's Foreign Policy for a Changing World' sets out the "core values" of Ireland's engagement in such areas as international development, human rights, disarmament, UN peacekeeping and the search for peace in the Middle East. Foreign Affairs Minister Charles Flanagan said "in the world of 2015 nothing is entirely foreign or wholly domestic".