The suspected military chief of ETA arrested in France on Thursday, Mikel Karrera Sarobe, is the separatist group's most senior leader and the "most wanted" in Spain, Spain's interior minister said.
Another suspect held along with him, Arkaitz Aguirregabiria del Barrio, is the group's "number two" and would have been Karrera Sarobe's future replacement had he not also been arrested, Alfredo Perez Rubalcaba said.
Barrio was the "most wanted" ETA member in France because of his suspected involvement in the killing of a French police officer during a shootout in the Paris region in March, the minister told a news conference.
He was also "in charge of training terrorists."
The pair were among five people arrested in raids by anti-terrorist police in southwestern France at daybreak on Thursday.
The minister said Karrera Sarobe is "currently the most senior leader of the terrorist group, the head of its military operations, the one who gives orders to ETA commandos."
He is suspected of involvement in recent ETA operations, including attacks in the island of Majorca last summer in which Spanish police officers were killed.
"We have two people, one the most wanted by Spanish police and the other most wanted by French police. It is a great step forward," said Rubalcaba.
He named the three others held on Thursday as Maite Aranalde Ijurco, also on Spain's wanted list, Benoit Aramendi, a French national, and his partner Laettitia Chevalier.
The minister hailed the arrests as a "magnificent example of police cooperation" between the two countries.
ETA, classified as a terrorist group by the European Union and the United States, is blamed for the deaths of 829 people in a 41-year campaign for independence for the Basque region of northern Spain and southwestern France.
Cooperation between Madrid and Paris has in the past two years led to the arrests of five other top ETA leaders in France, which the group has long used as a rear base from which to stage attacks in Spain.
ETA announced a "permanent ceasefire" in March 2006 but months later reversed course and in December 2006 set off a bomb at a car park at Madrid's international airport.
After it formally called off the ceasefire and tentative peace talks in June 2007, the Spanish government redoubled its efforts against ETA, and the arrests over the past three years of its leaders are believed to have severely dented its operations.