Swiss Justice Minister Christoph Blocher has called for increased measures, including phone tapping, to prevent terrorist attacks.
He said phone surveillance should be subject to approval by a panel of external experts to avoid abuses.
The proposals - part of a series of measures aimed at improving internal security - will be discussed by the cabinet later this year, Blocher told the SonntagsZeitung newspaper.
"Such measures have become important following the attacks in London which were planned by Islamic extremists," said Blocher.
He said it was vital to know more about potential extremists in Switzerland and indicated that he would call on the cabinet to consider the preventive surveillance of mosques and private homes.
However, he suggested that requests for phone tapping would have to be approved by a panel of external experts, such as former judges, to prevent any abuse of the system.
Surveillance of citizens, including phone tapping for preventive purposes, was restricted by the Swiss authorities more than ten years ago.
The measure was introduced in the wake of the discovery in 1989 of secret police files on nearly one million people and groups considered a risk for internal security.
Jürg Bühler, deputy head of analysis and prevention at the Federal Police Office, said there was no group known in Switzerland with a structure similar to the al-Qaeda organisation.
But he warned that several hundred people in Switzerland were linked in some way to terrorist groups or were supporting them.
"These people are not necessarily ready to use force themselves," he told the SonntagsZeitung.
But Bühler did not rule out the possibility that people born and educated in Switzerland might commit terrorist actions.
Farhad Afshar, who is president of the coordination centre of Islamic organisations in Switzerland, criticised the authorities for focusing their attention on repressive measures against Muslim groups.
"You can’t achieve peace by means of a police state," he told the NZZ am Sonntag newspaper.
He called for training courses for Imams and efforts to grant Islamic organisations a better legal status.
In another development, Switzerland’s cantonal authorities, which have a high degree of autonomy, say they lack sufficient personnel for preventive anti-terrorist measures.
About 200 people are currently working in the field of internal security in Switzerland. More than half of them are employed by the justice ministry’s analysis and prevention group.
swissinfo with agencies
At least 55 people died and about 700 others were injured in a series of bomb attacks on London’s transport system earlier this month.
The Swiss cabinet is due to discuss a series of measures to improve internal security, including phone tapping for preventive purposes.
Surveillance of citizens was restricted in the wake of the discovery in 1989 of secret police files on nearly one million people and organisations considered a security risk.