ATHENS, Greece -- As police closed in on Greece's most wanted terrorist group, Athens' chief Olympics organizer on Thursday told Australia's prime minister that the country was taking every precaution to ensure a safe games in 2004.

Security has been a top priority for Athens and the International Olympic Committee. Greece has budgeted a record $600 million for security.

"My country is preparing very, very, very carefully for the Olympic Games of 2004 because what counts is to host the world ... in peace, in friendship,'' said Athens 2004 chief Gianna-Angelopoulos-Daskalaki after meeting visiting Australian Prime Minister John Howard.

Howard was in Greece on an official two-day visit during which he is expected to discuss the possible participation of Australian companies in bidding for Athens 2004 contracts. Australia, which hosted the games in 2000, currently is not part of a Greek procurement agreement that lists countries eligible for government contracts.

Angelopoulos-Daskalaki's statements came as police announced they had in their custody a suspected member of the elusive November 17 terrorist group and had found one of the group's main hide-outs.

The suspect, and a weapons cache found in an apartment used by the terrorists, is the closest police have ever come to the deadly group since it first emerged in 1975.

No November 17 members have ever been arrested. The group has claimed responsibility for killing 22 people in 27 years, including industrialist Dimitris Angelopoulos, whose nephew is married to the Athens 2004 chief.

Athens is receiving advice from Britain, Australia, France, Germany, Israel, Spain and the United States on counterterrorism for the Olympics, while Sydney 2000 Olympics security chief Peter Ryan has been appointed as an adviser to the organizers.

The Australian prime minister said he was impressed by Athens' preparations and that Australia has a "special bond'' with the city's efforts to organize the Olympics.

Athens preparations have for years been marred by delays, and Howard said Sydney faced similar problems before hosting the games.

"I have no doubt that it will be an extremely successful Olympic Games. I have no doubt that between now and then there will be occasions when you will wonder about that, but could I assure you ... that was exactly the same in the lead up to the Sydney Olympics,'' Howard said.