The Swiss government wants to adopt tougher measures to prevent the country becoming a base for terrorists or a centre for the financing of terrorist activities.
It pledged on Thursday to ratify two United Nations conventions on combating international terrorism as well as to adopt new provisions into Swiss law.
"The importance of international cooperation in the prevention and combating of terrorism has grown beyond measure since the terrorist attacks in the United States on September 11," justice minister, Ruth Metzler, told a press conference.
Jean-Luc Vez, the director of the federal police office, told swissinfo that even though the government recognised that Switzerland was not a primary terrorist target, there was still a need to beef up internal security.
"Switzerland remains a safe country," he said. "But there are diplomatic institutions here and it is always possible that terrorists could attack - the threat is always there."
Switzerland has already ratified and implemented ten UN Conventions on the suppression of terrorism.
It now plans to also adopt the two remaining Conventions.
The Convention of the Suppression of Terrorist Bombings obliges signatory states to prosecute those suspected of being involved in organising, or helping in terrorist activities. It also requires countries to cooperate in preventing terrorist attacks.
The Convention for the Suppression of the Financing of Terrorism involves a series of measures aimed directly at preventing financial transactions that could help fund terrorist activities. Switzerland will need to make changes to its penal code before it can formally ratify the convention.
Swiss banks do not think changes to the penal code are necessary. "The current law does the job perfectly," said Thomas Sutter, a spokesman for the Swiss Bankers' Association.
A change to the penal code would be a political decision to meet the requirements of the UN Convention and would not change current practices as far as the banks are concerned.
They already regard terrorism as a criminal act, and when they suspect a crime of any sort they also check for links to terrorism.
The Swiss government was quick to join Washington's war against terrorism declared after September 11. It froze assets worth more than $50 million contained in Swiss banks and linked to suspected terrorists.
"We have proved over recent months that Switzerland has done a lot to combat the financing of terrorism," said Vez.
Earlier this month, the United States' attorney-general, John Ashcroft, praised Switzerland for its cooperation which led to the arrest of José Padilla - an American citizen accused of links to al-Qaeda and who is accused of plotting to detonate a radiological weapon in the United States.
Ashcroft also applauded the responsible way in which Switzerland had fulfilled its role as an important international financial centre.
Metzler also announced that the government had decided to strengthen security at diplomatic missions in Geneva. And a working group has been set up to look at ways of maintaining internal security within Switzerland.
The group's recommendations are not expected before next year. Urs von Däniken, chief of security and intelligence in Switzerland, said any new laws would take into account an individual's civil liberties.
"In formulating and making laws there is also a discussion of the balance between the individual's rights and the security of the state," he told swissinfo.
"This balance is the result of the political process and when we put forward a draft law it should be decided to what extent an individual's rights should be limited or not."