The arrests took place last Wednesday when Dutch police detained the German tourists in the northern Dutch town of Medemblik.
Along with another person, the tourists were suspected of being fugitive members of the former German terrorist organisation, the Red Army Faction (RAF), reports NLTimes.
After receiving a tip-off on the whereabouts of three people, whose descriptions appeared to match those of the terrorists, officers moved in, sealing off the area and bringing in a helicopter, reports Dutchnews.nl.
When two of the suspects left their holiday home, police went in and arrested them at a local supermarket.
However, on further investigation in co-operation with their German colleagues, Dutch authorities realised that they had caught the wrong people.
They returned the vacationers to their holiday home and apologised for the incident, but said that they had no regrets about applying this kind of procedure to high-profile suspects.
Dutch police have put out a bounty of €80,000 for anyone who helps find former RAF terrorists Daniel Klette, Ernst, Volker-Wilhelm Staub and Burkhard Garweg, who, next to their RAF-related activities, are also wanted for a spate of robberies on money transporters and at least six supermarket cash heists.
On July 27th, authorities in the Netherlands asked people to be on the lookout for the German far-left militants, saying in a statement that they “had reason to believe that the three are living in the Netherlands.”
They may be living “on a small secluded farm or anonymously in a city, constantly changing from home to home and pretending to be tourists,” police added.
“The fugitives are armed and dangerous and should by no means be approached when spotted.”
The remnants of German terrorism
The three are among a wider group of fugitives still on the run for membership of the anti-capitalist RAF, also known as the Baader-Meinhof gang, which emerged out of the radicalised fringe of the 1960s student protest movement.
The group, which had links to Middle Eastern militant organisations, declared itself disbanded in 1998.
Staub, Garweg and Klette, alleged members of the RAF's so-called "third generation" which was active during the 1980s and 1990s, are chief suspects in a 1993 explosives attack against a prison under construction in Germany's Hesse state.
In the attack, five RAF members climbed the prison walls, tied up and abducted the guards in a van, then returned to set off explosions that caused about €600,000 worth of property damage.
Klette is also a suspect in two previous RAF operations.